Germany's balcony solar craze: is US next?

Germany is experiencing a boom in small balcony solar power plants. They’re sold in supermarkets and online, require no permits, cost three digits, and owners receive subsidies. It’s a completely different scenario to the US, which is dominated by larger installations.

While shopping for groceries in your local supermarket, grab a 600W solar plant, bring it home, set it up on the balcony or terrace yourself, and then plug it into an electric outlet. That’s it. Let the savings begin, and you’re eligible for a subsidy too.

This sounds absurd in the US, but that’s the reality that many Germans are living in. Hundreds of thousands of these solar plants are bought and installed each year.

Small solar installations of up to 600 watts in output power don’t require permits in Germany, but owners must register with the local electricity company and federal agency.

Called “balkonkraftwerk,” these installations usually comprise just two solar modules and a microinverter. They’re many times smaller than a typical rooftop solar plant, and they’re also portable.

Owners are required to consume all the electricity that’s produced, as it’s not sold or transmitted back onto the grid. They only see their electricity meter, not to mention the climate catastrophe, tick over just a little more slowly.

“It is a great way for people to save real money on their electric bills and do good for the environment without having to invest a large amount of money upfront. You can literally buy one module at a time,” said Joshua M. Pearce, professor at Western University.

Six hundred watts is a tiny amount of power, not enough to boil water in a kettle or cook food on an electric stove. Those appliances usually consume electricity in the range of kilowatts.

However, many Germans live in apartments. For them, a small installation is one of the few options available for participating in the green revolution.

Exempt from VAT, balcony generators in Germany’s supermarkets start from around 500-700 euros (about $554-$775), but most of the cost in some cities is covered by local municipalities. For example, the rebates in the German state of Mecklenburg-Vorpommern were up to €500 for a single household.

And what about the savings?

German families consume, on average, 3,500 kWh of electricity yearly. A small power plant could knock off 600 kWh from that number, saving 17%. That’s about €50-100 saved each year. Even specialized storage systems for German apartments are sold by the companies like Anker to ensure that not a single kilowatt-hour is wasted.

While a single installation essentially costs peanuts and saves peanuts, “balkonkraftwerks” en masse significantly contribute to Germany's gas-dependent energy sector transformation. In the single year of 2021, between 140,000 and 190,000 such solar devices were sold in Germany, with a total output of around 60 MW.

In the US, however, typical household power consumption is three times higher, about 11,700 kWh each year, and electricity is three times cheaper compared to Germany. That would significantly reduce the return on such an investment in the US.

The US also lacks regulation for such power plants, as small installations usually require the same or similar permits as large rooftop solar plants.

“If plug-and-play solar is allowed nationally in the US the same as in Europe, the shift in regulations could radically alter the current photovoltaic market,” Pearce said.All the co

Many potential megawatts and dollars

The total potential market for plug-and-play solar systems in the US is an astounding 57 GW. That’s comparable to 57 large nuclear power units.

Small systems represent an opportunity for $14.3–$71.7 billion in retail sales, and they could generate around 108,417,000 MWh each year, the Pearce and Aishwarya Shrikant Mundada study found.

This would provide prosumers approximately $13 billion a year in cost savings, increasing by about 3% per year over the year lifetime of the systems.“Many advanced countries already allow plug-and-play solar, like the UK and most of continental Europe, yet US regulations have lagged behind. In some areas in the US, small PV installations require no permits, while in others, this is necessary. It depends on the utility and their rules, as there is no comprehensive national law,” Pearce said.

The researchers looked at technical requirements and found that many utilities create arbitrary non-technically valid barriers to grid entry for plug-and-play solar, one of those being an unnecessary utility-accessed AC disconnect switch.

Why wouldn’t you go big?

Even if you have ample space on your balcony, don‘t rush to order some photovoltaics just yet. Not everyone is excited about small installations, and there are better alternatives.

Kami Turky, CEO of Solar Energy Hackers, a solar company based in California, argues that a better way for homeowners to participate in producing green electricity for themselves in America is to build a community solar farm.

Balcony solar devices “sounds great on paper, but balconies often have a lot of shading, which can reduce the solar panel output by up to 70%. Yes, you can sometimes find spots that don't have shading, have great angles with the sun, etc. But now, what will you power using these solar plants? You can't connect it to your own home service panel without permission from your utility company,” Turky explained.

Balcony systems reduce the profits of utility companies, “so they'll fight it with all their power.”

“We are already getting a lot of pushback for whole installations. Imagine what they would do if every home installed a small solar system?” he continued.

While you may get a tax credit for a small installation in the US, you also need a home improvement permit from the local government and your landlord before screwing in some solar panels.

That makes community solar farms much better money-wise than investing in small systems.“We have a lot of land, and with new agrivoltaics solutions, we would be actually better off,” Turky concludes.

According to electrical engineer Atif Qazi, ample sunlight in some US regions is not enough to make small installations of 600-1500 watts viable.

“You need to get a permit from the local building authority (if Off-grid) and also from the electric company (if on-grid). The permit, in many cases, requires you to submit design plans regardless of the size of the solar plant, even if it only consists of a single plate. As such, it is important to check local codes before installation,” he said.For apartment owners wanting to participate, he would recommend cooperation.

“Pool the investment from all tenants of the apartment block to create a single solar park on the rooftop, the dividends of which can be shared.”

Safety is one more consideration. The maximum 600-watt limit in Germany is regulated so that small installations don’t exceed a 2.6-amp load on the home network. The same 600W power solar installation would feed almost double, 5 Amps, in the US.

“In the US, we have a 120-volt standard electrical outlet, which is not sufficient to power significant loads from small solar installations. As a result, we don't commonly see these types of systems here,” said Alan Duncan, CEO of Solar Panels Network USA.

Even in Germany, resentment towards balcony power plants persists amongst landlords, as an increased risk of fire is assumed.

One significant advantage of large PV systems at home or elsewhere is net metering schemes that allow one to credit the excess of produced electricity to a utility company, thus effectively storing electricity for later use.

In the US, a 30% tax credit is available at the federal level. Also, there are state incentives, which consumers can find in the Database of State Incentives for Renewables & Efficiency.