*Article* **Profitability Determinants of Unlisted Renewable Energy Companies in Germany—A Longitudinal Analysis of Financial Accounts**

**Maria-Kristiine Luts <sup>1</sup> , Jyrki Savolainen 1,\* and Mikael Collan 1,2**


**Abstract:** The fight against a climate crisis has urged nations and the global community to cut emissions and to define ambitious environmental goals. This has highlighted the importance of the renewable energy (RE) industry. Germany has been one of the most active countries in RE adoption. In this vein, the purpose of this research is to study and identify key profitability determinants of unlisted German electricity-producing RE-companies, many of which have been supported by the German Feed-in Tariff (FIT). A multi-year analysis based on panel data from 783 companies for the years 2010–2018 is used. The results show that both company- and industry-specific profitability determinants are statistically significant, but the company-specific determinants seem to be more important. The results shed new light on what drives the profitability of private German RE companies during the period of financial aid from the government and are of use to managers, regulators and investors alike, e.g., when the effects of different regulatory climates and industry environments, as well as states of business life cycle are considered. Furthermore, the implications of this study have wider environmental and economic importance as the performance of the RE companies is critical in achieving the emission targets of the energy industry and ensuring a more sustainable energy production for the future.

**Keywords:** renewable energy; electricity production; unlisted companies; Germany; feed-in tariff
