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French reduce solar PV funding

French solar photovoltaic (PV) feed-in tariff is being reduced to €0.12/kWh.

By Renewable Energy Focus staff

In December the French Prime Minister François Fillon introduced of a solar PV moratorium whereby no further solar PV systems were to be approved. This did not affect small solar PV systems up to 3 kW.

In February, there was an announcement of a strict limitation on yearly installed capacity to 500 MW. Now further reductions to solar funding have been announced.

The French Minister for the Environment, Nathalie Kosciuso-Morizet says that solar PV systems with a capacity of over 100 kW are now to receive a reduced remuneration of €0.12/kWh with immediate effect.

The tariffs apply to all solar PV systems regardless of whether they are installed on a roof or open-space. Open-space systems are now faced with severe cutbacks to the tune of at least 57% compared to remuneration in September 2010. Roof-top systems are also to incur reductions of 70%.

Feed-in tariffs for small PV systems are, momentarily, to be reduced by 20%. Over the course of the year, quarterly declines of 10% points will come into force.

“This step will see the comparably high PV tariffs in France adjusted in line with those of neighbouring countries,” says Markus Monssen-Wackerbeck, Head of Energy & Utilities at EuPD Research. “Such adjustments are ambitious but nonetheless necessary for the long term remedy of PV price divergences in various national markets.”

Market pundits now estimate that parts of solar projects currently in the planning phase may not be executed. According to the solar initiative, Toche Pas à Mon Panneau Solaire, there were projects in the pipeline of 5.3 GW at the start of the halt in construction ordered by the Government in December. Some had already received building as well as net connection approval. Other sources believe that the figure for projects in the planning phase is over three GW, EuPD Research says.

“There are difficult times ahead for these projects,” says Markus A.W. Hoehner, CEO of EuPD Research, “these systems were planned using a completely different calculation model and some of them will partly be recalculated.”

“The industry should use this pressure to bring high systems prices in the country down to a competitive, European level,” adds Markus A.W. Hoehner.

Figures from the current European PriceMonitor published by EuPD Research show that, on average, the costs for a French solar PV system under 10 kW are about €4400 and peak at €6000. Systems between 10 and 100 kW come with a price tag of €3860.

However, market experts at EuPD Research see a downward trend in installed capacity as likely. “The market will consolidate in the next months, yet France still has considerable untapped potential in the private roof-top sector. Manufacturers that respond to this increased price pressure and, by highlighting their first rate quality and strong brand name, position themselves in the right segment will survive these tough changes,” concludes Monssen-Wackerbeck.

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Photovoltaics (PV)  •  Policy, investment and markets