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German solar feed-in tariff to sink another 15%

The German Minister for the Environment, Norbert Röttgen (CDU) says the feed-in tariff for solar electricity will be reduced – against the warnings from the industry – by a further 15%.

According to EuPD Research, these cutbacks will lead to a “short-term run” on solar photovoltaic (PV) systems and “falsely push the prices up”.

A revision has been going on behind the curtains of the feed-in tariffs for solar electricity as laid out in the Renewable Energy Act (EEG) for a few days now.

Although the solar feed-in tariffs were adjusted in the consumers’ favour to the current market conditions just a few days ago, Röttgen is presently outlining the further cuts to solar support.

EuPD Research says the cuts to the solar feed-in tariff are as follows:

As of 1 July, the feed-in tariffs for solar electricity for open-space systems will be reduced by a further 15%. Taking into account the cuts that were already made at the beginning of January, large-scale systems will be taking a 26% cut in promotional funding overall;

As of 1 April, the feed-in tariffs for solar electricity for rooftop systems will be reduced by a further 15%. Taking into account the cuts that were already made at the beginning of January, rooftop systems will be facing a 24% cutback altogether; and

Additionally, there will be a growth corridor for 2011. If the newly-installed solar power capacity in 2010 is more than 3.5 GW, there will be a further 2.5% reduction along with the reduction that is already planned. If more than 4.5 GW is installed, the planned reduction will increase by a further 5%.

Increasing the pressure on the German PV industry

“The PV industry has never before experienced such massive cutbacks. This is naturally increasing the pressure on the German PV industry due to the tightened cost situation,” says Markus A.W. Hoehner, CEO of the market research and consulting institute EuPD Research, on the current developments in Berlin.

“It is to be expected that there will be a very short-term run on PV systems, which will significantly decrease when the tariffs are reduced on the day which has just been announced,” Hoehner adds.

“Hardly any manufacturer can overcome cuts of this kind. The European manufacturers of quality systems and German tradesmen will be particularly badly affected.”

Comparisons with the fated Spanish solar PV market are raising their heads. While the solar PV industry in Spain grew enormously in 2008, the market collapsed completely last year. The reason was the excessive cuts in solar funding and feed-in tariffs.

EuPD Research predicts that in the medium-term, the solar PV sales markets will increasingly move to other regions. The effect that the changes will have on Germany as a location for industry cannot be fully grasped at this point.

“Emigration of leading technology companies, bankruptcies, collapse in sales for tradesmen and a weakened location for the solar industry – these are all realistic scenarios,” Hoehner concludes.

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Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity


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