Price of electricity and support mechanisms

This LAP analyses:
• The existing support mechanisms for stationary fuel cells (micro-CHP),
• The legal treatment of FC micro-CHP in comparison with other types of cogenerations and solar PV plants,
• The administrative steps necessary to benefit from the support mechanisms.


Does the use of a FC benefit from a support mechanism be it a general support for cogeneration, for self-consumption of electricity or a specific measure for stationary FC.

Pan-European Assessment:

The FC micro-CHP systems must compete with well-established technologies and therefore a non-discriminatory and technology open policy and legal frameworks at EU and national level are needed in order to overcome the market roll-out phase. The residential stationary fuel cells working on natural gas have to be treated in a same way as any other high-efficiency micro-cogeneration units. In case FC micro-CHP systems operate on green gases incl. hydrogen, they have to get the same preferential treatment as power units generating electricity from renewable sources.
The overview of the national policies and funding schemas reveals significant differences in commitment and support for FC micro-CHP systems among the partner countries.

The most of them do not provide any support mechanisms for FC-micro CHP systems. The existing support measures in the rest of the countries are very fragmented and unlikely to contribute substantially to the mass deployment of the residential stationary fuel cells. The most commonly used support measures available for all types of cogeneration units are feed-in tariffs, CAPEX support and incentives for electricity self-production.
Is it a barrier?
Type of Barrier
Economic barrier
Assessment Severity
As an alternative of the national support schemes is the fuel cell contracting. The full investment in the fuel cell system and the maintenance is provided by the energy (supplying) company and the households shall only pay a rent in form of monthly flat rate and reduced electricity and heat prices.


Question 1 Does the FC benefit from this form of support:: a - feed-in tariff
a) The purchase price for produced electricity consist of three parts: so called “usual price”, the surcharge according to CHP Act and the grid costs avoided as a result of decentralized generation. 1. The “usual price” Operators of CHP plants with an electrical capacity < 100 kW may require from the grid operator to purchase the CHP generated electricity. If the operator of CHP plant and the grid operator cannot reach an agreement about the price the CHP generated electricity must be purchased at the usual price. The usual price is the average price for base load electricity on the power exchange European Energy Exchange (EEX) in Leipzig in the previous quarter. 2. CHP surcharge CHP surcharge is paid for each kilowatt-hour generated from new, modernized or retrofitted CHP plants, regardless of whether the electricity is for self-consumption or is fed into the public grid. Precondition for the subsidy is the approval of the CHP plant by the Federal Office of economics and Export Control (BAFA).The amount of the surcharge depends on the electrical output of the CHP. According to CHP Act the surcharge for installations with capacity < 50 kW from 1 January 2016 is: 1. For electricity fed into electricity grid - 8 cents/kWh and for self-consumed electricity - 4 cents/kWh paid: a) For new CHP plants for 60,000 full hours of use; b) For modernized CHP: -for 5 years or alternatively for 15,000 full hours of use, if the costs of the modernisation amount > 25 <= 50% of the costs for the new construction of the CHP plant, - for 10 years or alternatively for 30,000 full hours of use if the costs of the modernisation amount > 50% of the costs for the new construction of the CHP plant. These surcharges are paid by the network operator calculated from the date of the start of the permanent operation. 2. Advanced lump sum payment of the surcharges for brand-new CHP plants < 2 kW Operators of such plants may, at the request by the network operator, get in advance a lump sum payment of the surcharges for cogeneration electricity in amount of 4 cents/ kWh for 60,000 full hours of use. 3. Remuneration of the avoided network costs The CHP unit provides electricity directly on site. Since the electricity does not have to be transported over long distances, there are no costs for grid usage. These “avoided” grid usage costs must be paid to the CHP plant operator. Unfortunately, there is still no fixed compensation for small CHP.
Question 1 Does the FC benefit from this form of support:: b - feed-in premium
b - no
Question 1 Does the FC benefit from this form of support:: c - quota obligation and certification scheme
c - no
Question 1 Does the FC benefit from this form of support:: d - CAPEX support
d - Investment subsidy for mini- CHP < 20 kW Mini CHP < 20kW may be funded by the Investment incentive program for mini-CHP of the Federal Environment Ministry, implemented by the Federal Office of Economics and Export Control (BAFA) if the requirements of the program are met (it applies at most for new plants): - the CHP plant is recognized as eligible by BAFA; - the CHP plant is not located in an area with a connection to and use of district heating; - availability of electricity meter for produced electricity; - for systems with a capacity of 10 kW or more, an information and communication technology is available which can receive signals from the electricity market and is technically able to respond to them. 1. Basic investment subsidy; The amount of the basic subsidy varies depending on the capacity of the mini-CHP plant. 2. In addition for particularly energy-efficient mini CHP may be paid: a) Bonus subsidy for electricity efficiency – 60% of the basic subsidy; b) Bonus subsidy for heat efficiency – 25% of the basic subsidy The detailed technical requirements for the CHP plants are described in the Guidelines for the promotion of cogeneration plants up to 20 kWel issued by the Environmental Ministry. KfW 433 programme (for FC mini CHP with electrical output 0.25 to 5.0 kW) The programme promotes the purchase of fuel cell heating in residential buildings in the form of a subsidy with a fixed amount of 5,700 euros and a variable bonus linked to the fuel cell's electrical output. electrical output of 0.25 to 5.0 kW in the new building and old building. KfW 433 funding and the mini-CHP grant from the Federal Office of Economics and Export Control (BAFA) cannot be cumulated.
Question 1 Does the FC benefit from this form of support:: e - tax incentives
e - A) Tax relief (reimbursement) of the energy tax for the fuel used in CHP (natural gas) according to the Energy Tax Act. Reimbursement of the energy tax is granted only until the complete deduction of depreciation of the main components of the installation. It is paid after notification to the competent main customs office (Hauptzollamt). Application for and payment of reimbursement are made retrospectively on an annual basis. The CHP must be highly efficient and achieve a monthly or an annual utilisation rate of at least 70%. B) Tax–exemption of electricity tax for self–consumed electricity according to the Electricity Tax Act The CHP must be highly efficient and achieve a monthly or an annual utilisation rate of at least 70%. The CHP capacity is < 2 MW
Question 1 Does the FC benefit from this form of support:: f - incentives to self-production (net-metering)
f - Reduction of the renewable energies (EEG) apportionment according to the Renewable Energy Act Payment of 40% of the EEG–apportionment on the quantity of electricity for self–consumption. The CHP must be highly efficient and achieve a monthly or an annual utilisation rate of at least 70%.
Question 1 Does the FC benefit from this form of support:: g - others
According to Renewable energy heat act it is possible to use CHP systems in new building as an alternative to the mandatory share of renewable energy sources in heating.
Question 2 Techno comparison: a - FC benefit from specific treatment?
yes, up to 5kW
Question 2 Techno comparison: b - FC benefit same treatment cogeneration techno?
Question 2 Techno comparison: c - FC benefit same treatment as solar PV (and other means of self-production of electricity)?
c - No, as CHP plants
Question 2 Techno comparison: d - Explain how Stationary FC support (or absence of support) compare with the comparison technology identified above.
d - The treatment for CHP plants depends only on the capacity and energy efficiency of the plant, not on the technology used.
Question 3 Explain here the administrative steps necessary to benefit from the support mechanism(s)
The FC micro-CHP units have to be approved by the Federal office of economics and Export control (BAFA). The CHP plants must be new, modernised or retrofitted.
Describe the comparable technology and its relevance with regard to hydrogen
With regard to the incentives – CHP plants

National legislation:

EU Legislation:

  • Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency
    This Directive establishes a common framework of measures for the promotion of energy efficiency within the Union in order to ensure the achievement of the Union’s 2020 20 % headline target on energy efficiency and to pave the way for further energy efficiency improvements beyond that date.

    It lays down rules designed to remove barriers in the energy market and overcome market failures that impede efficiency in the supply and use of energy and provides for the establishment of indicative national energy efficiency targets for 2020.