Einspeisevergütung

Einspeisevergütung translates to feed-in tariff and is a policy mechanism used in Germany and other countries to encourage the use of renewable energy sources. It guarantees a fixed, above-market price for electricity fed into the public grid from renewable energy installations such as solar panels or wind turbines. This price is set by the government for a predetermined period, typically 20 years, ensuring a predictable revenue stream for renewable energy producers. The goal of the Einspeisevergütung is to make renewable energy investments more financially attractive, thereby accelerating the transition to a sustainable energy supply. The tariff rates are usually differentiated based on the size and type of renewable energy technology. Over time, as the cost of renewable energy technologies has decreased, the feed-in tariffs have also been progressively reduced to reflect market realities and to manage the overall cost of supporting renewables. The funding for the Einspeisevergütung is typically borne by all electricity consumers through a surcharge on their electricity bills.