Study

The role of regulation in the transformation of the electricity market

Using the photovoltaic market as an example, we have carried out a scenario-based analysis to examine the extent to which the regulatory approach of the last 20 years has shaped the expansion of the sector – and whether the climate targets can be achieved on the current trajectory.
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Background

Germany aims to become climate-neutral by 2045. However, photovoltaics is falling short of its potential. It remained unclear to what extent the regulatory approach of the past 20 years has shaped the expansion of PV – and whether the climate targets can even be achieved on the current trajectory.

Our Approach

  • 1

    Analysis of actual developments in the PV market and EEG regulation since 2000.

  • 2

    Projections for two scenarios up to 2035 (status quo versus no change in funding policy).

  • 3

    Alignment with PV expansion targets and identification of regulatory implications.

Result

Although the share of renewable energy in gross electricity generation rose from 6 % (2000) to 43 % (2020), photovoltaics accounted for only 9 % in 2020. A comparison of scenarios shows that the PV expansion target required for 2030 (around 150,000–200,000 MWp) required for 2030 cannot be achieved with the regulatory path actually taken – it would only have been achievable had there been no change in the subsidy policy from 2009 onwards. This has clear implications for a targeted, reliable regulatory framework.

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