I have already mentioned the two most important parts. For electricity, it was the so-called EEG or Renewable Energy Sources Act. In North America, it is also sometimes known as the feed-in tariff or FiT scheme. This scheme works in two ways: first, it gives a guaranteed rate; second, it guarantees many other factors, like the grid connection. The guaranteed grid connection ensures that you can sell your electricity to the market, something that is not possible in Texas and other places. There are other regulations that take away certainty.
So one side is the purely financial side. The other side is the uncertainty in investment conditions. These incentives are often called subsidies, but they are not subsidies because they are not coming from the government's budget. They are coming from the transmission system operator, who has to buy this electricity and then sells it again on the free market.
Every utility in Germany, or every retailer for power, has to buy a share of this electricity to sell to customers. So every customer in Germany gets the same share—14% of electricity from renewables in their power mix. This is something similar to a renewable portfolio standard but very different in respect of what is actually regulated.
The rates compare not too badly with rates on the general market. On the power exchange, you can have power prices as low as 35 euros per megawatt hour, but we have also observed power prices as a high as 160 euros per megawatt hour.
The tariffs for wind, which are the lowest, are in the range of 60 euros per megawatt hour. So the more economical of these electricity sources are becoming marketable. We are also thinking about how to change this market setup so as to allow for a free market in this area.
Actually, I must correct myself. The most economical source is actually hydro power, even in Germany. But we have very limited natural potential for hydro power. The one that still has growth potential is wind.
So much for the electricity side. I have maybe one last word. The investment on the electricity side is made mainly by a special type of project developer, who has been developing this product for the last 15 years. The traditional utilities within Germany do not invest in wind-power farms. They are starting to invest in offshore, but not onshore. This is an indication that these rates are not high enough to give a standard mainstream utility an incentive to invest. They'd rather go into fossil fuels, where they can still make more money.
For heat, we had an incentive scheme that was building on investment support. If someone wanted to build a solar thermal collector on his roof, he would have to go to a merchant and get it installed and then hand in the bill to a public authority to get a cheque for reimbursement. The details on these regulations have changed very often. This proved to be a pretty unreliable program for consumers, which limited the take-up and effectiveness of these subsidies.
At the beginning of this year, the government put in place a regulation that obliges each household to cover a certain share of its heat demand from renewable energies. So if you build a new house, you have to cover about 15% of your heat demand from a solar resource. This is a regulation that has been proven on a municipal level in Germany. So far a number of municipalities have tried to put this in place in their local area and it has proven very effective. However, the federal government actually does not have any powers to put this in place and no mechanism for enforcing this. So we are now waiting for the länder, which are comparable to your provinces, to put in place directions on how to enforce this locally. And then also municipalities might, or might not, put in place even stronger regulations and even stronger demands on this. But without action on the side of the municipalities and länder, we will not see strict enforcement of this law.
Does that answer your question?