History of the Energiewende

Full-cost compensation for photovoltaics

At the end of the 1980s, local utilities in three German towns introduced "full-cost compensation" -- proto feed-in tariffs -- for photovoltaics, which led to the implementation of Germany's first national feed-in tariffs.

In addition to Wolf von Fabeck (mentioned above), others were interested in finding ways to replace nuclear power and, increasingly, coal power; after all, acid rain had become a concern, as had man-made climate change from carbon emissions – with German Chancellor Helmut Kohl of the Christian Democrats even speaking in the Bundestag of the "threat of grave climate change from the greenhouse effect" in 1987.

At the end of the 1980s, von Fabeck's newly founded Solar Energy Association (SFV) managed to get the local utility in his hometown of Aachen to pay two deutsche marks for a kilowatt-hour of power from photovoltaics after it was demonstrated that the utility already paid that much or more to cover peak power demand, which photovoltaics would offset. The idea – compensation for power generated is sufficient to cover the cost of the investment – has become known as the Aachen Model. Yet, the idea did not even come from Germany. Aachen was specifically copying a similar policy in two Swiss towns, and California had adopted a similar policy at the beginning of the 1980s with its Standard Offer Contracts.

Indeed, two other German towns – Freising and Hammelburg – had even implemented a full-cost compensation policy slightly before Aachen, but Aachen drew the most attention. One person behind the success story in Hammelburg was Hans-Josef Fell (Greens), who later was one of the chief architects of the Renewable Energy Act (EEG) from 2000 along with Social Democrat Hermann Scheer.

But first, these small, disparate success stories led to the implementation of Germany's first national feed-in tariffs in 1991 in an unusual coalition between the Greens and the Christian Democrats. At the time, the two parties were hardly on speaking terms with each other (that has since changed). But the CDU had one condition – the proposed law would not be submitted as a joint effort between the Christian Democrats and the Greens, but merely as a Christian Democratic proposal.

Legend has it that the law, which was only two pages long, almost did not come about. It was the last thing voted on in the parliamentary session in 1990, and it passed mainly because the CDU did not think that a couple of windmills would do much harm anyway.