Degression

Degression refers to the photovoltaics in terms of the annual reduction of the feed-in tariff. This tariff is received by system operators for the electricity that their photovoltaic system feeds into the public grid.

Purpose of Degression:

• Adjustment to declining costs: The costs for photovoltaic systems have continuously decreased in recent years. The degression adjusts government support to this trend to avoid over-subsidization.
• Promotion of market maturity: The degression aims to help photovoltaic technology become market-ready faster and be competitive without government subsidies.

Mechanism of Degression:

The level of degression is determined by law and depends on various factors, such as:

• Cost development: The decreasing production costs of solar panels and other components affect the level of degression.
• Expansion of photovoltaics: A strong expansion of photovoltaics can lead to a higher degression, as a larger installed capacity results in increased market competition.

Effects of Degression:

• Decreasing revenues: For system operators, degression means a reduction in revenues from the feed-in tariff.
• Investment decision: Degression is an important factor in the investment decision for a photovoltaic system. System operators must consider the expected degression when calculating the profitability.
• Promotion of self-consumption optimization: With decreasing feed-in tariffs, self-consumption of self-generated solar power becomes more attractive.

Current developments:

The specific design of degression is subject to regular political decisions. In recent years, there have been various adjustments to the Renewable Energy Sources Act (EEG) that have affected degression.

Conclusion:

Degression is a central element in promoting photovoltaics in Germany. It helps to reduce the costs of renewable energies and advance the energy transition. For system operators, degression is an important factor that must be considered when planning and calculating the profitability of a photovoltaic system.

Additional keywords: Renewable Energies, EEG, Feed-in Tariff, Photovoltaic System, Solar Power, Self-Consumption