Document summary
German feed-in tariffs (FITs) for generating electricity from renewable sources are entering their third phase. Continued cost declines make solar PV, wind and biomass increasingly competitive with traditional electricity sources. In response, the key elements of Germany’s 2012 EEG, including reduced FIT payments, a market premium option, a cap on FIT-eligible PV electricity, and a 52GW PV capacity threshold, mark an evolution of German FITS toward a “grid parity” future where policy is more flexible but may offer less to investors. In terms of “grid parity” the electricity cost of small PV systems in Germany is occasionally below retail rates.