Renewable energy asset class What photovoltaics are doing today as a technology and investment 

Record growth: Photovoltaics is growing faster than any other energy source 

Solar energy is growing faster than any other energy source. Germany is one of the European leaders in terms of expansion.

The expansion of solar energy in Germany and Europe has reached a new dynamic in recent years. The PV extension added again in 2024: According to the Federal Network Agency, 16.2 GW were newly installed - another record year.³ In 2023, an annual growth rate of over 40 percent was achieved throughout Europe for the third consecutive year, with a total of 55.9 GW newly installed.⁴ 16.4 GW were added in 2025; the cumulative total installed capacity in Germany thus reached 117 GW.⁵ 

More than half of the total net electricity generation in Germany now comes from renewable energies: 59.7 percent in 2023.⁷ Photovoltaics contributed around 12 percent of total net electricity generation², and this share already increased to around 14 percent in 2024.³

By 2030, at least 80 percent of the electricity consumed in Germany will come from renewable sources. The legal target is 215 GW of installed PV power. In order to achieve this, an average of around 19.6 GW of expansion would be required per year in the future.⁵ The direction is clear and the pace must continue to increase. 

How photovoltaics works and why the technology is so robust

PV systems are sophisticated, durable and pay for themselves several times over in terms of energy - with minimal operating costs.

The basic principle of photovoltaics is the so-called photoelectric effect: Light encounters a semiconductor such as silicon, releases electrons from their bond and thus generates electrical current. This direct current is converted into grid-compatible alternating current by an inverter.²

What makes photovoltaics particularly interesting for investors is the combination of sophisticated technology and a long service life. Modern PV systems achieve a service life of just over 30 years - even longer with appropriate maintenance. Even at the end of their service life, open-area plants usually still deliver around 85 percent of their original yield. Operators often calculate conservatively with up to 0.5 percent degradation per year. However, according to Fraunhofer ISE, the actual annual degradation is only about 0.15 percent.⁸

Added to this is the remarkable harvest factor: Over the course of their service life, PV systems generate 11 to 18 times the energy required to produce them.⁸ They therefore pay for themselves multiple times in terms of energy - without running fuel costs. 

Photovoltaics: Marketing channels and investment case

The investment case for photovoltaics is based on three marketing legs: EEG, electricity exchange and PPAs.

The technology is mature and the investment case has been tried and tested for years - this makes photovoltaics an asset class that can be interesting for different investor groups. Commerz Real’s first solar fund was launched back in 2005; since then, the company has built up and expanded extensive experience with PV investments.²

Three ways to market solar power

In addition to generation, the marketing of the generated electricity is also decisive for the investment case. There are basically three central models for this:²

1. EEG (Renewable Energies Act): The law, which has been in force since 2000, regulates priority grid feed-in and offers guaranteed remuneration - especially for smaller systems. For large plants, the fixed feed-in tariff has now largely been replaced by a tendering procedure with a market premium model, which acts as price hedging downwards.
2. Electricity exchange: In direct marketing, electricity is sold at current daily prices. Since generation fluctuates depending on the weather and many plants feed in simultaneously, battery storage systems offer an important lever here: They allow electricity to be produced and fed in at a more favourable time (at higher market prices).
3. Power Purchase Agreements (PPAs): Long-term purchase agreements with industrial customers, power suppliers or data centres - usually with terms between 10 and 15 years - are now considered the preferred marketing model for large plants. In Germany, the PPA market grew by more than 300 percent from 2022 to 2023.² The German Energy Agency (dena) estimates that up to 25 percent of Germany’s electricity demand could be marketed by PPA by 2030.⁹

Marc Böhnke, Managing Director of Evergy Engineering, sums up the importance of PPAs: “In Europe, power purchase agreements have developed into an important pillar of growth in the photovoltaics sector in addition to tenders and self-consumption.”² He expects stable long-term profitability for the asset class, supported by falling development costs, improved system components and the integration of storage solutions. 

There are various options for electricity marketing:

Innovations: Photovoltaics opens up new areas

In addition to classic open-plan systems, photovoltaics is increasingly opening up new areas: from farmland to car park.

In addition to the classic open-plan park, new usage concepts are being developed increasingly, which open up previously unused areas for solar power generation. For institutionally managed portfolios such as klimaVest, classic open-area plants and - increasingly - agri-PV projects are in the foreground, as approval procedures and yield forecasts are already well established here. The other concepts are technically promising, but are still predominantly in the early implementation phases.

Overview of opportunities and risks

Photovoltaics has clear strengths - but also risks that investors should know and take into account.

Photovoltaics has clear strengths. According to Fraunhofer ISE, the electricity generation costs of all PV systems without battery storage were below 10 cents per kWh in 2024.¹⁴ This makes solar power, especially from open-plant systems, one of the cheapest types of electricity generation. In addition, there are low operating and maintenance costs, long-term stable yields and broad political support at national and EU level.

The risk profile includes weather-related fluctuations in production, the need for land for open-area plants (competition with agriculture), dependence on international suppliers - especially from China - as well as partially opaque supply chains.² Investors should also keep an eye on fluctuating electricity prices (depending on the marketing model). Furthermore, approval procedures and grid connection can delay projects - from the installation decision to commissioning it often takes two years or more.²

There are answers to each of these risks at the professional portfolio level - above all geographical diversification. Timo Werner, fund manager for klimaVest, explains:  

klimaVest: Photovoltaics in concrete terms in the portfolio

klimaVest invests in photovoltaics, wind and grid infrastructure - geographically diversified and positioned in Europe.

klimaVest, Commerz Real’s open-ended infrastructure fund for private investors, invests in precisely this segment. The portfolio currently includes 43 assets in 6 European countries - including solar farms in Spain, France, Germany and Sweden. The fund volume is now more than 1.8 billion billion euros.

Geographical diversification is not an end in itself: Sun hours vary considerably between Northern Scandinavia and Southern Spain. Locations in several countries mitigate the weather-related yield risk of an individual market. klimaVest also relies on mixed marketing models: EEG-hedged investments combined with PPA projects result in different cash flow profiles that complement each other.

Since April 2025, the grid infrastructure asset class has also been part of the portfolio, including an indirect holding in the German transmission system operator Amprion. klimaVest has thus expanded its sector allocation and is now invested in wind onshore 35.6 percent), electricity grid 25.6 percent) and solar 19.4 percent).