Germany FIT not to be reduced for 2011

Germany’s Federal Environment Ministry has confirmed that the installed photovoltaic capacity between March and May of this year amounts to around 700 megawatts. Nevertheless, the economic wing still wants to cap the market.

While it looks like Germany's photovoltaic FITs won't be cut, there is uncertainty over how much installed capacity will be added throughout the year.

The feed-in tariffs in Germany won’t be cut on July 1. "Only 700 MW were installed," Environment Secretary Katherina Reiche (CDU) told Thursday’s Financial Times Deutschland. This figure has been confirmed by the Germany grid agency (Bundesnetzagentur).

As such, expectations are that a projected 2.8 gigawatts will be installed throughout 2011. This figure falls rather short of industry expectations, however, as pv magazine heard during this year’s Intersolar Europe, held last week in Munich, that between 4.5 to five GW worth of photovoltaic systems will be installed this year.

Furthermore, analysts at Jefferies & Company believe that between five and six GW could be installed. In an industry note issued, they commented: "Our estimates are still for 5.5 GW this year in Germany. We recently polled some 50 industry participants throughout the value chain at Intersolar in Munich last week with consensus sticking to five to six GW for the year."

If just 2.8 GW are installed, this would even be less capacity than the government had originally envisioned in its targets, which had projected between three and 3.5 GW.

"The clear market decrease in the past months shows that no clearance exists for a still faster sinking of solar electricity," explained Carsten Körnig, managing director of Germany’s solar association, BSW-Solar. He warned the government, with an eye on the upcoming amendments to Germany’s renewable energy law (EEG), against further cutting the country’s solar incentives.

2011 Green Energy Forecast

German Solar FIT may be reduced by 9% on the 1st July

Solas Power has learned that a decision by the German Federal Network Agency as to the scale of the downward revision is yet to be announced, some predictions are that the final scheduled reduction will amount to a nine percent cut on July 1, followed by another on January 1, 2010.

Just last week German Federal Minister for the Environment, Nature Conservation and Nuclear Safety Norbert Röttgen, announced that solar subsidies were to be cut by a further six percent as of March 1, 2012. This reduction had found its way into amendments to the EEG during the departmental approval process. However, reports are that Chancellor Angela Merkel gave a free hand to members of the ruling coalition parties during consultation, and the unscheduled six percent cuts were removed.

This morning the Cabinet of the German federal government discussed and approved the EEG amendments, at the same time deciding to abandon nuclear energy. The result is a phased shutdown of nuclear power plants in Germany by the year 2022.

On Wednesday, the Environmental Committee of the Lower House of Parliament will discuss the amendments to the Renewable Energy Act (EEG). Experts on the topic will then be heard during the public meeting. The law will then be discussed in the Lower House of Parliament and – according to government plans – is to be adopted even before the summer parliamentary recess. Approval by the Upper House of Parliament is not required for the EEG amendments.

PV FIT for 2011 may remain unchanged

Solas Power has learned from a German PV expert that it has been mooted that the FIT will go up again. However, this has not been offically confirmed and it is believed that this is not finally decided yet.

Although, the FIT for wind will be very much supported as wind turbines are more efficient and generate more energy.

IT is believed that the FIT for PV will probably be frozen until end of this year but nobody knows when or whether it will really come into force.

This week during the Intersolar in Munich everybody hopes that there will be a final decision made, but politicians are slow and the lobby of the nuclear power is always very strong and in opposition to support renewables.

Solar Industry saved from extra Feed-in tariff cuts in Germany

Solar industry saved from extra feed-in tariff cuts in Germany

The German cabinet, under the leadership of Chancellor Angela Merkel has removed controversial proposals to include an extra 6% cut to the German feed-in tariff next year.

The German cabinet, under the leadership of Chancellor Angela Merkel has removed a controversial proposals to include an extra 6% cut to the German feed-in tariff next year. The German cabinet today agreed on closing all its nuclear power plants between 2015 and 2022. Although wind energy will be supported at higher rates to secure 35% of its energy needs come from renewables, the solar industry retains support but without the extra FiT reductions.

In a week that sees the global PV industry verge on Munich, Germany for Intersolar Europe, a serious concern held by the industry that PV installations in Germany would suffer a serious decline due to the continued cuts has been lifted.

The German cabinet agreement means that on January 1st, 2012 only a 9% cut to the FiT is expected. However, each annual gigawatt of PV installations over the quota of 3.5GW will result in a further 3% cut in the FiT. This will be applied to the 12-months to the end of each September.

A 24% ceiling cut has also been proposed should installations reach over 7.5GW. The same system will also be adopted for 2013, potentially giving much needed mid-term stability to the tariff conditions.

According to a research note from Jeffries International, ‘The German solar market is going to remain the bedrock of global solar at least for the next three years with the minimum annual goal of 3.5GW.’

Ratification is expected later this month

EEG compromise: PV-funding to be tailored to installed capacity

Solas Power has learned that a heated debate was had in Berlin between branch representatives and members of the German government on the adjustment of solar incentives, a step which can indeed be seen as an earlier than planned reduction. Future feed-in-tariffs (FIT) are to be adjusted in accordance with annual installed capacity. Possible cutbacks are being brought forward to July 1. Market experts see the danger of an artificial stimulation of the market and warn against a misinterpretation of the possible pull-forward effects.

The German solar industry association (BSW-Solar) has agreed to a new compromise on PV funding with the German Federal Ministry for the Environment. The resolution sees further reductions to FIT’s in accordance with the amount of solar electricity installed annually. The expected installed capacity for the year 2011 will be based on the figures for new installations in the period from March to May. By multiplying the result by a factor of four, the Federal Net Agency should then come to a projection of the estimated installed capacity for the year 2011.

Should the calculated PV market capacity be more than 3, 500 MW, further reductions of 3 percent are to be introduced mid-year on July 1. The resolution reached between legislators and BSW-Solar has determined a decline of 6 percent should projected capacity be over 4,500 MW, annually installed capacity of over 5,500 MW would incur cuts of a further 9 percent, more than 6,500 MW by 12 percent and an installed capacity to the same amount as last year, over 7,500 MW, will be subject to a 15 percent reduction. As the planning of open-space plants requires more time, their degression will not come into effect until September 1, 2011.

Funding is, as previously planned, to be cut by a further 9 percent at the turn of the year, 2012. Furthermore, an audit carried out by the Federal Net Agency will verify that the estimations made in spring 2011 were accurate. According to the announcement, subsequent corrections will be made should this be of necessity.

Right Direction – Questionable Impact
Following this announcement, the adjustments presented by Norbert Röttgen, Minister for the Environment and Günter Cramer, president of BSW-Solar are to be sent to parliament for deliberation. A final decision is expected in February. As the country will soon be in the throws of state elections, experts assume that there will not be a lengthy bargaining process on percentage points, as was seen in the year before last.

„The modification of incentives in line with market conditions along with a regular review of tariffs is generally a step in the right direction and is supported by the industry” assessed Markus A.W. Hoehner, CEO of the market research and consulting house EuPD Research. Generally speaking, the fact that tariffs are to be aligned with the figures for installation should also be greeted. However, as to what extent a reduction in FIT’s can contribute to a pacifying of the markets is open to doubt. “The announcement, itself, of an early adjustment on July 1 equates to a simulation of the market,” says the expert and warns against potential pull-forward effects.

Hoehner, a market observer with over a decade of expertise in international markets of renewable energies points out: “The German PV market is still overheated, the reoccurring discussion on amendments to incentives fuels this situation further.” Germany currently finds itself in a dilemma. Without further adjustments the market is threatened by excessive growth, a point which speaks for the measures suggested. Yet a “run” in the first half of the year is likely to overcompensate for the slowdown effects of said adjustments.

„The review of the EEG in 2012 will play a decisive role in the future of photovoltaic in Germany“, believes Markus A.W. Hoehner. “Legislators, industry representatives and stakeholders now face the challenge of developing a concept that encompasses all sources of renewable energy. A clear message on the future of the German renewable energy industry should also be sent to international markets in order to strengthen investment security”. Hoehner sees the tone in which this discussion has taken place as positive. In comparison to last year, there is a greater willingness to enter talks and a clearer course of action can be recognized. Although the current debate may not be crucial to the long-term development of the industry, it certainly shows the direction to be taken. It is imperative that a destabilization of the markets, as seen recently in France, Spain or Czech Republic, is avoided.