Less than 24 hours after its launch, Germany abruptly halted a subsidy scheme on Wednesday. This decision was prompted by an overwhelming demand for incentives aimed at promoting the installation of rooftop solar panels, storage solutions, and charging infrastructure, raising concerns about the efficacy of sporadic subsidies in the transition to clean energy.
The program, funded with €300 million ($317M) by the transport ministry for the current year, offered homeowners with electric vehicles the opportunity to receive a subsidy of up to €10,200 for the installation of photovoltaic systems and charging stations.
The rapid drain of the program's financial resources raised questions within the solar power market regarding the ability of one-time interventions to establish sustainable demand and accelerate the shift to renewable energy sources.
"On the scale of 33,000 cars in a market where you have 3.3M new cars per year...it's not very effective," said the CEO of solar company, 1Komma5, Philipp Schroeder.
The subsidy program, which was launched Tuesday morning, aimed to boost the transition to EVs while reducing the need for public charging stations.
The transport ministry announced the program earlier this month and had allocated around €500M for the program, with 200M reserved for next year. But after 33,000 applications were submitted within 24 hours of launch, the funds were exhausted.
The program was seen by some as a disruption to the market, creating uncertainty as consumers considering installing a solar system may now feel the need to wait until the second part of the subsidy kicks in next year.
"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," Schroeder added.