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February 29, 2012
By: Craig Morris

Agreement reached on Germany's solar FITs?


Photo credit: Energie Landschaft Morbach

According to a report in the Financial Times Deutschland, the governing coalition has reached an agreement on additional cuts to the country's feed-in tariffs for solar, but feed-in tariffs for all other types of energy remain unchanged.

 

The German newspaper reports that the rates for newly installed ground-mounted arrays will drop by an additional 30 percent starting in April, by 25 percent for mid-sized systems, and by 20 percent for small systems. Additional cuts of 15 percent were already scheduled for July 1, so they have simply been moved ahead to April 1 and increased. 

 

Another change is completely new, however. Starting in April, only 90 percent of the power produced will be paid for. Producers will either have to sell the other 10 percent directly or consume it themselves. Because 10 percent direct consumption is not a problem for small rooftop arrays on homes, the amount of direct consumption could even be larger for those systems. At a press conference later today, the compromise is to be officially made public. 

While the compromise may sound drastic, similar cuts over the past few years have repeatedly failed to keep up with the falling price of solar, so the question is once again whether the market will be able to remain profitable under these rates. Germany continues to pay some of the lowest prices in the world for photovoltaics, with small arrays being up to 60 percent cheaper than even the largest systems in the sunny southwestern US, for instance.

 

And while foreign onlookers continue to misinterpret these cuts as indicating that Germany has finally realized that solar is too expensive, within Germany the consensus is that these cuts show that feed-in tariffs work. After all, the goal of this policy was to bring down the cost of photovoltaics all along, and the speed at which this has happened has surprised everyone. It is also worth noting that Germany will still not have an absolute ceiling on its PV market even after these changes are implemented. (Craig Morris)

 

Source: Renewables International The Magazine


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