In Germany’s latest solar projects auction, bids exceeded the available capacity by more than double, a clear sign of strong competition that drove down subsidy costs. The average bid price fell to just 4.76 cents per kWh, reflecting both a reduced need for financial support and continued high investor interest.
Growing Competition and Falling Subsidy Needs
Germany’s latest auction for solar projects attracted bids that more than doubled the available capacity, signaling strong investor confidence in the sector. The Federal Network Agency (BNetzA) announced that while 4.7 gigawatts (GW) of projects were submitted, only 2.15 GW were awarded across 242 projects. This high level of competition led to lower subsidy costs, reinforcing the country’s renewable energy goals.
The strong demand for solar projects continues to drive down subsidy requirements. BNetzA president Klaus Müller noted that high competition is reducing the financial support required for new installations. At 4.76 cents per kilowatt hour (kWh), the average bid price for this auction fell by six percent from the previous round’s 5.05 cents per kWh, reaching its lowest point since 2019.
The auction, which closed on December 1, 2024, focused on large-scale solar projects, particularly open-space installations and systems built on non-building structures. In total, 524 bids for a combined capacity of 4.7 GW were submitted, though only 242 were successful.
Bid prices for the awarded projects ranged between 3.88 and 4.95 cents per kWh, for a volume-weighted average of 4.76 cents per kWh. This was the fifth consecutive auction where total bid volume exceeded 4 GW, highlighting sustained interest in Germany’s solar market.
Regional Distribution of Awarded Solar Projects
Bavaria emerged as the leading region in this auction, securing 120 successful bids totaling 916 megawatts (MW) of capacity. Other regions also received substantial awards, including Schleswig-Holstein with 213 MW from 21 projects, Lower Saxony with 192 MW from 18 projects, Baden-Württemberg with 176 MW from 20 projects, and Brandenburg with 170 MW from 13 projects.
These results underline Bavaria’s position as a major hub for solar energy development in Germany, while the broad participation of other states shows that expansion is gaining momentum nationwide. This decentralization of solar projects helps ensure a more balanced distribution of renewable energy production.
To build on this momentum, Germany is implementing policy changes to accelerate solar expansion. The recently introduced Solar Package I, for instance, increases the maximum capacity for open-space systems to 50 MW and provides privileges for certain projects. However, these new regulations were not applied in this latest auction, as they still await approval under state aid rules.
For the first time, this latest auction incorporated minimum environmental criteria for solar projects. These new requirements are designed to improve the ecological compatibility of solar farms, ensuring that renewable energy expansion does not come at the cost of biodiversity or landscape integrity. Integrating these standards reflects Germany’s commitment to balancing clean energy growth with environmental protection.
Future Auctions and Market Outlook
Germany’s next solar projects auction is scheduled for March 1, 2025. The continued high level of competition suggests that demand for solar investments will remain strong. The government’s long-term commitment to expanding solar capacity is expected to attract even more developers and investors to future tenders.
The sharp decline in subsidy costs indicates that solar energy is becoming more competitive with traditional energy sources. As technology advances and production costs fall, Germany is likely to see even greater efficiency in future solar projects.
The latest auction results highlight the country’s leadership in renewable energy deployment. By maintaining strong policy support and encouraging private-sector investment, Germany is reinforcing its position as a global frontrunner in the transition to clean energy.
With solar projects at the heart of its strategy, Germany is well on its way to achieving its renewable energy goals. The continued expansion of solar power will play a key role in ensuring a stable, sustainable, and low-carbon energy future.
Kindly send more information