Germany plans to impose a 90% windfall profit tax on photovoltaic power generation and other companies 2022-11-29

Recently, the German government has drawn up a plan to levy a windfall profit tax of 90% on the profits of some clean energy power generation companies such as photovoltaics, offshore wind farms, and nuclear power to fund its consumer assistance program.


Windfall profits tax, also known as "special income tax", is a tax on unreasonably high profits obtained by the industry.


In the first three quarters of 2022, Germany's newly installed photovoltaic capacity will be 4.9GW, a year-on-year increase of 21%. As of the end of September this year, Germany's cumulative photovoltaic installed capacity reached 63.4 GW.


For a long time, Germany has vigorously promoted energy transformation and increased the proportion of renewable energy in the power structure. In 2021, the share of renewable energy generation in Germany's electricity will reach 46%.


However, in recent years, due to the impact of the energy shortage in the European Union caused by the conflict between Russia and Ukraine, the German energy supply chain, which is heavily dependent on Russian natural gas, has experienced a crisis, and the price of electricity and natural gas has soared. From the fourth quarter of this year to next year, electricity prices for German residents will remain high, which will further stimulate demand for photovoltaic installations.


The market predicts that in the fourth quarter of this year, there will be a rush to install photovoltaics in Germany, and the annual installed capacity is expected to be around 10GW, doubling year-on-year; it is expected that the growth rate of newly installed photovoltaics in Germany will remain at about 50% in 2023.


According to the medium and long-term development plan of German energy, by 2030, the power generation capacity of renewable energy will reach more than 80% of its total power generation capacity; among them, the installed capacity of photovoltaic will reach 215GW.


This also means that in the next eight years or so, Germany will add about 19GW of photovoltaic installed capacity every year.


Not only that, in March this year, in response to the soaring energy prices caused by the conflict between Russia and Ukraine, Germany planned to advance the goal of 100% renewable energy power generation to 2035.

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