Germany halts e-car solar subsidy programme after one day amid high demand | Reuters

[1/2]A logo depicting an electric car is seen on the floor of a charging bay inside an ALDI supermarket car park in Manchester, Britain, September 8, 2023. REUTERS/Phil Noble Acquire Licensing Rights

BERLIN, Sept 27 (Reuters) - Germany on Wednesday halted a subsidy scheme less than 24 hours after it was launched due to strong demand for the payments to install rooftop solar panels, storage and charging points, highlighting questions about the effectiveness of one-off subsidies in the switch to green energy. Lithium Ion Solar Battery

Germany halts e-car solar subsidy programme after one day amid high demand | Reuters

With a budget of 300 million euros ($317 million) from the transport ministry for this year, the programme offered a subsidy of up to 10,200 euros for homeowners with electric cars to install a photovoltaic system and a charging station.

The exhaustion of the program's funds so quickly raised questions in the solar power market about the effectiveness of one-time market interventions in creating sustainable demand and boosting the switch to renewables.

"On the scale of 33,000 cars in a market where you have 3.3 million new cars per year ... it's not very effective," Philipp Schroeder, chief executive of solar company 1Komma5, told Reuters.

The programme, launched on Tuesday morning, was aimed at boosting the switch to electric cars and reducing the need for public charging stations.

Around 33,000 applications were submitted within 24 hours of launch, meaning the earmarked funds had been exhausted, a spokesperson for KfW bank, which is giving out the funds, said.

The transport ministry announced the program earlier this month and had allocated a total of some 500 million euros for the programme, with 200 million reserved for next year.

The programme was thus disrupting the already-booming market and creating uncertainty as most consumers who were considering installing a solar system with a wallbox may wait for the second part of the subsidy to kick in next year, Schroeder added.

"The message from our side is: Please, please don't make it worse. Just do not come up with any one-time subsidies ever again," he said.

The application for the subsidy was open online on Tuesday morning around 0800 am CET and closed at around 2 am on Wednesday, the KfW spokesperson said, adding that the initial application only requires an investment plan, with documents needed within two years of the bank's approval.

The eligibility conditions for the program do not include a maximum household income but do require ownership of a house and an electric vehicle.

"The big share of the population who are tenants are excluded, and those who own apartments are excluded too," Lion Hirth, energy markets professor at Hertie School, told Reuters.

The program was introduced by the ministry of transportation, whose sector has been consistently failing to meet its climate targets.

The transport ministry was not immediately available to comment.

Germany's solar power association BSW said it was not surprised the funds were exhausted so quickly, citing booming demand for residential photovoltaic systems and wallboxes to charge electric vehicles.

Demand for solar power systems more than doubled in the first half of 2022, compared with the year before, and one in six German homeowners are planning to install panels on their roofs, BSW said.

As the cost of electric car charging at home with home-generated solar power falls to less than third compared with purchasing from the grid, some 42% of people installing panels on their roofs would install a wallbox, it added.

A typical 70 square meter residential photovoltaic system could offer electricity for up to 20,000 kilometers of electric travel in addition to powering a four-person household.

Reporting by Riham Alkousaa and Andreas Rinke; Editing by Friederike Heine and David Holmes

Our Standards: The Thomson Reuters Trust Principles.

Riham Alkousaa is the energy and climate change correspondent for Reuters in Germany, covering Europe’s biggest economy's green transition and Europe’s energy crisis. Alkousaa is a Columbia University Journalism School graduate and has 10 years of experience as a journalist covering Europe’s refugee crisis and the Syrian civil war for publications such Der Spiegel Magazine, USA Today and the Washington Times. Alkousaa was on two teams that won Reuters Journalist of the year awards in 2022 for her coverage of Europe’s energy crisis and the Ukraine war. She has also won the Foreign Press Association Award in 2017 in New York and the White House Correspondent Association Scholarship that year.

Volkswagen will suspend production of ID.3 and Cupra Born electric cars at its Zwickau and Dresden plants in Germany in the first two weeks of October due to weaker demand, a spokesperson for the carmaker said on Tuesday.

Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.

Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.

The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.

The industry leader for online information for tax, accounting and finance professionals.

Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.

Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.

Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.

Germany halts e-car solar subsidy programme after one day amid high demand | Reuters

Solar Equipment All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.