Germany is one of the world's top photovoltaics (PV) installers, with a solar PV capacity as of 2011 of almost 25 gigawatts (GW). As of 31st of October 2012, there were 31.62 GW of photovoltaics connected to the electrical power network. The German solar PV industry increased to about 7.6 GW in 2012, and solar PV provided 18 TWh (billion kilowatt-hours) of electricity in 2011, about 3% of total electricity. Some market analysts expect this could reach 25 percent by 2050. Germany has a goal of producing 35% of electricity from renewable sources by 2020 and 100% by 2050.
A feed-in tariff is the most effective means of developing solar power. It is the same as a power purchase agreement, but is at a much higher rate. As the industry matures, it is reduced and becomes the same as a power purchase agreement. A feed-in tariff allows investors a guaranteed return on investment - a requirement for development. A primary difference between a tax credit and a feed-in tariff is that the cost is born the year of installation with a tax credit, and is spread out over many years with a feed-in tariff. In both cases the incentive cost is distributed over all consumers. This means that the initial cost is very low for a feed-in tariff and very high for a tax credit. In both cases the learning curve reduces the cost of installation, but is not a large contribution to growth, as grid parity is still always reached.
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