Technology as a key issue

Other renewables

Other types of renewable energy include solar heat and geothermal energy (which can be used to generate electricity and provide heat). While Germany does not have great geothermal potential like Iceland and the United States, for instance, certain applications are nonetheless worthwhile. Solar heat has not been as successful as solar electricity mainly because the cost of collectors has not been reduced considerably over the past ten years, mainly due to high installation costs.

Germany also has geothermal resources – heat from below ground. The first geothermal power plant in Germany went into operation in 2003, though it has not yet led to many subsequent projects.

The general public remains concerned about microseismic activity, noise, and impacts on groundwater. Early community involvement, careful siting of the power plants, and the best available exploration and operation technology are therefore crucial to minimize risks and increase acceptance. Nonetheless, compared to North America and Asia, the geothermal potential in OECD Europe (including Germany) is markedly smaller and restricted to certain attractive regions, where good energy yields with high temperatures can be achieved. Growth of geothermal electricity generation is therefore expected to be significantly slower than for wind and solar.


The original feed-in tariffs of 1991 were implemented primarily to help existing small hydropower facilities to remain profitable. Some new systems have been built in the past 25 years, but the potential of hydropower in Germany has largely been tapped. For instance, in 1990, some 17.4 TWh of hydropower was generated compared to 19.3 TWh in 2015. However, that roughly ten percent increase depends a bit on the weather; in 1996, 22 TWh was generated. Against that benchmark, hydropower production has actually decreased by ten percent. Parallel to the modernization of the systems, environmental improvements at many hydro plants have been installed over the past decade.

Renewable heat

When heat is generated from renewable energy – such as biomass and solar thermal – one speaks of "renewable heat," but the term can also encompass the recovery of waste heat for heating applications. Because heat makes up roughly 40 percent of German total energy consumption, the potential for renewable heat is greater than for renewable electricity, since overall electricity only makes up 20 percent of the country's energy consumption. Nonetheless, Germany has not had the same success in promoting renewable heat, partly because it has never offered feed-in tariffs for it. The German government has a goal of getting 14 percent of the country's heat from renewable sources by 2020. Under the Renewable Heating Act, all new buildings are required to have a heating system with a minimum share of renewable energy.

Renewable heat from biomass

Up to now, most renewable heat has come from biomass, with the most common feedstock being woodchips, firewood, and, increasingly, wood pellets. Germany's Market Incentive Program also supports the generation of renewable heat from biomass, with strict requirements for efficiency and emissions. In addition, waste heat from biomass units is used in district heat networks. Indeed, Germany's Renewable Energy Act requires that most biomass units recover part of the waste heat produced in the process of generating electricity (this is called "cogeneration of heat and power").

Renewable heat from heat pumps and solar thermal

Increasingly, new technologies using renewable energy sources are appearing on the market. In addition to biomass, for instance, there is "shallow" geothermal, in which heat is taken from just below ground or from groundwater. This heat can then be used in combination with heat pumps, as can heat from ambient air. In 2016, a record number of heat pumps - 66,500 - were installed in Germany.

Solar thermal collectors can be also installed on homes and businesses to cover demand for heat. At the end of 2016, Germany had 2.24 million solar thermal systems installed across approximately 19.9 million square meters of surface.

In the case of buildings, in particular, the investments in efficiency may offset consumption over decades, but the upfront costs may still be prohibitive. To overcome such obstacles, Germany has implemented a Market Incentive Program, which provides funding for renewable heat systems (solar thermal collectors, modern biomass heaters, and efficient heat pumps).

Nonetheless, this market has not grown nearly as quickly as the PV sector. One reason for solar thermal's sluggishness is that Germany does not have special feed-in tariffs for solar heat, only for solar power. Solar heat has therefore depended partly on government rebates funded by an eco-tax and emissions trading. Although the cost of solar thermal collectors has decreased, overall system costs have not, partly due to persistently high installation costs. In addition, the market for solar thermal collectors has been largely restricted to small one and two family house applications. Other countries, particularly Denmark, have favored large ground-mounted collectors, offering five-fold decreased collector prices and competitive heat generation costs. In Germany, even though the systems are supported financially, this market segment has potential to develop further. As part of the federal government's "Strategy for the Efficiency of Buildings", further activities to support large solar thermal installations in district heating have been announced.

At present, solar heat only covers around one percent of Germany heat demand, which is especially unfortunate since heat makes up around 40 percent of German energy consumption, whereas electricity only makes up 20 percent (the other 40 percent is motor fuels).

In other words, the potential for renewable heat is much greater than the potential for all sources of electricity in Germany's transition to renewables.