Executive Summary
Current Market Needs
Recent Market Trends
Competitive Landscape
Best Prospects for U.S. Exporters
Market Entry
Regulations / Registration Process
Technical Barriers & Tariffs
Procurement & Tenders
Getting Paid / Trade Finance
Upcoming Trade Events
Local Industry Resources
U.S. Commercial Service Information
Tab Options
Executive Summary
Current Market Needs
Recent Market Trends
Competitive Landscape
Best Prospects for U.S. Exporters
Market Entry
Regulations / Registration Process
Technical Barriers & Tariffs
Procurement & Tenders
Getting Paid / Trade Finance
Upcoming Trade Events
Local Industry Resources
U.S. Commercial Service Information
Executive Summary:
2019 Electricity Generation in Germany
The information in this pie chart is available on this site: https://www.energy-charts.de/energy_pie.htm
The share of renewables is likely to stay above 45% in 2020. Although favorable weather boosted solar output in 2019, more renewable power sources are coming online, and weather patterns are expected to remain relatively stable in 2020. In the long run, the share of renewables is expected to be 65% by 2030.
In 2017, the renewable energy industry employed 300.000 people with growing numbers in the wind sector and declining numbers in the solar industry resulting a turnover of 16.2 billion EUR.
Despite the good news, Germany is still dependent on fossil fuels with the highest share coming from the most carbon-intensive lignite coal. It is not very likely that the climate target of reducing carbon emissions to 40 percent by 2020 will be met. The Federal Government now expects to limit emissions to 32 percent, compared to 1990 levels. https://www.bmwi.de/Redaktion/EN/Dossier/renewable-energy.html
Current Market Needs:
Further investments in offshore wind, photovoltaics, energy efficiency in buildings and the industry, grid expansion and energy storage projects will be necessary. Implementation of a new, smart energy infrastructure will also be needed to balance the fluctuating supply of renewable sources.
Consequently, large-, medium- and small-scale storage solutions and economically viable photovoltaic and wind systems will be a significant driver for the future of decentralized power generation.
The growth rate of renewables was important for many years, now systemic challenges move into the focus. Solutions are needed to best integrate variable renewable energy into the power system while maintaining economic and reliable operation of the grid.
Blockchain could be an ingredient for the next phase of the energy transition in Germany.
Recent Market Trends:
The cost of decentralized energy generation in Germany has declined considerably due to technological developments, incentive schemes and an increase in installed capacity in the past few years. In Germany, the price for photovoltaic rooftop system have fallen by 70% since 2006. A similar development can be seen for battery prices. Hence, the government has reduced financial incentives for the installation of new renewables, mainly pertaining to photovoltaics.
More than a million investors (private residents and farmers) participate in providing electricity to the grid. The generated electricity is mostly used by the property owner directly or fed into the public grid. German energy cooperatives (app. 850 in 2017) have invested around €1.2bn in so-called “citizens’ power plants”. They own almost half of the installed capacity of renewable energy installations. More than 40 percent of these cooperatives own solar panels, around 20 percent have invested in wind turbines, biomass, or hydropower. The remainder of the co-operatives owns co-generation units or has invested in grid infrastructure.
Competitive Landscape:
U.S. manufacturers will face a highly competitive market since domestic manufacturers offer a broad spectrum of renewable energy technology. The most successful market entrants are those that offer innovative products featuring high quality and modern styling. Germans are responsive to innovative high-tech U.S. products. In many cases, price is not necessarily the determining factor for German buyers, but quality.https://www.trade.gov/germany-country-commercial-guide
Best Prospects for U.S. Exporters:
Energy efficiency in buildings and industry:
85 percent of the energy consumed by Germany’s private households is used for heating and hot water. With two thirds of the heating systems in Germany considered inefficient, upgrading old systems is a growing priority and offers opportunities for heat pump manufacturers (air, ground and water-source), solar-thermal, and district heating solution providers. German industry still has massive untapped potential for investment in energy efficient production processes and technology. Growth is predicted for service and technology providers as well as energy efficiency products and services.
Energy infrastructure:
Major investments in the expansion of the transmission and distribution networks are needed as the German electricity networks are not yet ready to cope with the transport of a growing share of renewable energy. Decentralized generated electricity needs to be collected and transported to the consumers over long distances. ICT solutions and state of the art technologies are needed, including superconductors, high-temperature lines and local power transformers
Energy storage:
Battery storage with solar systems, large-scale storage solutions are playing a growing role in
Electric Vehicles Charging Infrastructure
The demand for charging infrastructure and related innovation is growing. Germany has set itself the goal of becoming the leading market and provider for electric mobility by 2020. Although the electric mobility market is still small in absolute terms, domestic demand for electric vehicles is rising.
Photovoltaic
Solar energy is already one of the most important renewable energy sources for both the supply of electricity and heating.
Market Entry:
The German market is decentralized and diverse. Experienced representation is a major asset to any market strategy, given that the primary competitors for most American products are domestic firms with established presences.https://2016.export.gov/germany/build/groups/public/@eg_de/documents/webcontent/eg_de_129252.pdf
Regulations / Registration Process:
A company carrying out a commercial business operation must register in the public commercial register (Handelsregister) and the local trade office (Gewerbe-/Ordnungsamt). The information is public and can be viewed by other companies. Small businesses, civil partnerships (GbRs), https://www.gtai.de/gtai-en/invest/investment-guide/establishing-a-company
Technical Barriers & Tariffs:
Germany presents few formal barriers to U.S. trade or investment. While not directly discriminatory, government regulation by its complexity may offer a degree of protection to established local suppliers.
Safety or environmental standards can complicate access to the market for U.S. products. American companies interested in exporting to Germany should make sure they know which standards apply to their product and obtain timely testing and certification.
Further information can be found in the Country Commercial Guide Germany: https://www.trade.gov/germany-country-commercial-guide
Procurement & Tenders:
Public procurement accounts for a significant portion of the German and the European economies. While these contracts provide substantial revenue opportunities, they are subject to a unique set of laws and regulations.
Government procurement in Europe is governed by both international obligations under the WTO Government Procurement Agreement (GPA) and EU-wide legislation under the EU Public Procurement Directives.
U.S.-based companies can bid on public tenders covered by the GPA, while European subsidiaries of U.S. companies may bid on all public procurement contracts covered by the EU Directives in the European Union. However, U.S.-based companies and European subsidiaries of U.S. companies do not enjoy the same bidding rights.
A comprehensive report provided by our U.S. Commercial Service colleagues in Brussels can be provided on demand.
Websites on EU public procurement legislation and the Government Procurement Agreement (GPA)
Public Procurement http://ec.europa.eu/growth/single-market/public-procurement/index_en.htm
The Government Procurement Agreement, on the website of the WTO: http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
The Government Procurement Agreement, on the U.S. “Export.gov” portal: http://tcc.export.gov/Trade_Agreements/Exporters_Guides/List_All_Guides/exp_005325.asp
Public Procurement Germany https://gettingthedealthrough.com/area/33/jurisdiction/11/public-procurement-germany/ European Tenders Electronic Daily TED https://ted.europa.eu/TED/main/HomePage.do
Getting Paid / Trade Finance:
Most of import transactions by German customers, especially those involving large German distributors, take place under seller-buyer terms, such as the common 30/60/90-day accounts, or payment against documents.
The most popular payment mechanism by which German importers remit payment to their U.S. suppliers is the electronic funds transfer (EFT, equivalent to SWIFT or wire transfers), the fastest and cheapest way to transfer funds. Current technology makes online transfers reasonably secure and transparent.
Cash-in-advance is rather rare in German import payment.
Both private and public credit insurance are available in Germany. Euler Hermes (German), Coface (French) and Atradius (Dutch) are among the private providers and the main public insurer is the Staatliche Kreditversicherung (Hermes-Bürgschaften), which is administered by Euler Hermes and is used to cover German exports to countries with high political and country risk.
United States exporters tend to purchase credit insurance to a much lesser extent than European exporters due to the relatively greater recourse to factoring in the United States.
Overall, German firms continue to enjoy a relatively good reputation for their payment practices and management of credit.
The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit agency of the United States though primarily focusing on developing markets worldwide.http://www.exim.gov .
Upcoming Trade Events:
Energy Storage Europe, Duesseldorf, canceled due to coronavirus disease: https://www.eseexpo.com/
Hannover Messe, April 12-16, 2021: https://www.hannovermesse.de/home
Intersolar Munich, June 17-19, 2020: https://www.intersolar.de/en/home.html?CommunityId=25922
WindEnergy, Hamburg, September 22-25, 2020: https://www.windenergyhamburg.com/en/
Husum Wind, September 14-17, 2021: https://husumwind.com/en/
Local Industry Resources:
U.S. Commercial Service Information:
For more information on the renewable energy sector in Germany, please contact:Bettina.Capurro@trade.gov
