KfW Renewable energies program
- Investments are available in two programs:
- Standard: in plants for electricity generation from renewable energies photovoltaic (PV), biogas, hydro, onshore wind or geothermal energy) and heat generation in combined heat and power (CHP) systems.
- Premium: in large plants for heat generation from renewable energies (solar panels, biomass, biogas, deep geothermal energy) as well as CHP installations and heat networks/pumps not promoted under the Standard program.
- Premium funding was initiated to strengthen the establishment of the renewable technologies in the heat market (in the context of the Market Incentive Program by the Federal Ministry for the Environment). These technologies include:
- solar panel systems with more than 40 square meters gross collector area for the purpose of water heating and/or space heating of properties with three or more residential units or non-residential properties with minimum 500 square meters of usable area
- biomass plants for the combustion of solid biomass with a rated heat capacity of more than 100 kW
- beat-controlled biomass CHP with a maximum of 2 MW
- heat networks with a minimum of 50 percent of heat generated by renewable energies or with a minimum of 20 percent of heat generated by solar energy and with heat sales of a minimum of 500 kWh per year and meter of route
- heat storages with more than 10 cubic meters
- biogas pipes with a minimum length of 300 meters (for biogas used for CHP purposes or as biofuel)
- heat pumps with a rated heat capacity of more than 100 kW
- facilities for the development and use of deep geothermal energy with a drilling depth of more than 400 meters and a minimum thermal fluid temperature of 20°C.
- The funding shall be granted as a long-term, interest-reduced loan up to 100 percent of the investment costs (excluding VAT), maximum total lending of EUR25 million per project (Standard) and EUR10 million per project (Premium).
- Additional reduced interest rates are available for small to medium-sized enterprises (Premium).
- Eligibly for funding depends on the program part.
- In 2012, KfW provided a total credit volume of around EUR365 million for Premium. Since initiating the program, over 10 years ago, credit volume over EUR2 billion for both programs has been granted.
- Loan-term: 5, 10 or 20 years with a repayment-free, start-up period of up to three years.
KfW offshore wind energy program
- Special promotion of offshore wind energy projects within the 12 nautical mile zone or the German Exclusive Economic Zone (EEZ) of the German North and Baltic Sea. Project financing for up to 10 offshore wind parks is available in the form of:
- direct loans granted by bank syndicates (a maximum of EUR400 million/project)
- finance packages comprising loans from KfW on-lent through a bank
- direct loans limited to 70 percent of the total debt capital required per project and EUR700 million per project
- direct loans to finance unforeseen additional costs (a maximum of EUR100 million per project).
- Eligible to apply: all project companies investing in the German EEZ or in the 12 nautical mile zone of the North Sea and the Baltic Sea.
- Maximum funding: EUR5 billion.
- Loan-term: up to 20 years with a repayment-free start-up period of up to three years.
Incentives for energy efficiency and corporate environmental protection, housing, home modernization and the reduction of carbon emissions
- Low interest rates on loans and grants used for the efficient production of energy, usually accessed by SMEs.
- Subsidies for new privately owned buildings or buildings which are brought to a new standard in renewable energy or energy savings.
- Reduced interest rates, abatement of instalment payments on loans, direct subsidies for modernizing buildings and reducing carbon emissions.
- Budget: around EUR900 million for energy-efficient house modernization in 2011.
Sources: KfW Bankengruppe, Berliner Morgenpost (9 April 2011), BMWi Förderdatenbank
Remuneration is available for electricity produced. All tariffs and ranges apply to plants commissioned in 2012. Plants commissioned prior to 1 January 2012 are subject to the feed-in tariffs that were in force in the year of first commissioning.
- Depending on nominal generation capacity of the individual plant:
- up to 5 MW: cent (ct)6.3/kWh to ct12.7/ kWh
- more than 5 MW: ct3.4/kWh to ct5.5/kWh.
- Degression: 1 percent per annum (p.a.).
- Basic premiums depending on nominal generation capacity of the individual plant: ct6.0/kWh to ct14.3/ kWh.
- Additional premiums depending on the feed-stock boiled up to ct8/kWh.
- Using the fermentation of organic waste, depending on nominal generation capacity of the individual plant: ct14.0/kWh to ct16.0/kWh.
- Additional gas preconditioning bonus (up to ct3/kWh) for all above available if nominal generation capacity of plant does not exceed 5 MW.
- Using fermentation of manure: ct25.0/kWh.
- Degression: two percent p.a.
Other methane gas (mine, landfill, sewage sludge gas, etc.)
- Depending on nominal generation capacity of the individual plant: ct3.98/kWh to ct8.60/kWh.
- Degression 1.5 percent p.a.
- Additional gas preconditioning bonus for all the above (up to ct3/kWh).
- Degression: five percent p.a. from 2018 onward.
- Additional premium for using petrothermal technologies: ct5/kWh.
- Basic feed-in tariff for a wind turbine (WT) commissioned in 2012: ct4.87/kWh.
- First five years: basic increased feed-in tariff of ct8.93/kWh.
- Increased feed-in tariff for a WT fulfilling technical requirements for system intervention of the TSO (“Systemdienstleistungsbonus”):
- ct0.48/kWh for the time the basic increased feed-in tariff is received and, if the newly installed WT is commissioned before 31 January 2015.
- Degression: 1.5 percent p.a., when commissioned after 1 April 2012.
- Repowering bonus of ct0.5/kWh for the time the basic increased feed-in tariff is received and granted for sites where a WT with higher nominal capacities are commissioned (pre-degression). It is required that the replaced WT was commissioned before 1 January 2002.
- Direct distribution is possible at higher market rates, pursuant to Sec 33a-33f EEG.
- Basic: ct3.50/kWh.
- First 12 years: ct15/kWh (extended depending on water depth and distance from shore).
- Degression: zero percent p.a. until 2017; 7 percent p.a. from 2018 onward.
- Grid connection from the offshore switch station to the shore borne by the TSO (Sec 17 par 2a EnWG).
If a WT has been commissioned before 1 January 2018, the plant operator can claim a feed-in tariff of ct19/kWh for the first eight years. This is not in contrast to the regular feed-in tariff of ct15/kWh for the first 12 years.
In and on buildings
- Depending on the amount of nominal generation capacity: ct11.02/kWh to ct15.92/kWh as of April 2013.
- Degression: 1 percent per month plus a maximum of 1.8 percent points per month if a pre-defined threshold of nominal generation capacity added based on the annual extension corridor (“Zubaukorridor”) is exceeded, according to Sec 20a EEG. The annual extension corridor amounts to 2.5GW to 3.5GW. The degression is adjusted on a quarterly basis based on extrapolated annual amounts of nominal generation capacity added.
In open spaces
According to the Renewable Energy Act, plants in open spaces are only subsidized if they were erected in areas being subject to an approved land-use plan that has been:
- approved prior to 1 September 2003 or
- approved after 1 September 2003 where plants were erected either on land to be devoted to different usage (Konversionsfläche) or alongside freeways (Autobahnen) or railroad lines.
Up to a nominal generation capacity of 10 MW: ct11.02/kWh as of April 2013, degression is equivalent to plants erected on buildings.
Legal: The feed-in tariffs are regulated in the Renewable Energy Act (Gesetz für den Vorrang Erneuerbarer Energien or Erneuerbare-Energien-Gesetz).
Duration of feed-in tariffs: Usually 15 to 20 years.
Administrative procedures: Applications must be filed with the Ministry of Environment or the governmental-owned bank KfW.