Germany: FDP looking to cap PV market at one GW21. November 2011 | Applications & Installations, Global PV markets, Industry & Suppliers | By: Sandra Enkhardt/James Harris
The German Liberal Party (FDP) leader is looking to place a one gigawatt (GW) cap on solar subsidies. Federal Minister for the Environment Röttgen has swiftly rejected the demand, however. He has also said he wishes to preserve the existing subsidy system.
The topic of solar subsidies doesn’t just generate different opinions within Germany’s ruling coalition. The Liberals cannot even agree on a common photovoltaics policy among themselves.
Federal Minister of Economics and FDP party leader, Philip Rösler has expressed support for an annual photovoltaics cap of one GW. "The reduction of expansion to 1,000 megawatts per year would be an effective contribution to cost limitation." That was the position attributed to his Ministry by the Frankfurter Allgemeine Zeitung on Friday, November 18.
The business wing of the Christian Democrats has already spoken out for a cap on photovoltaics at one GW. "For 2016, power grid operators are expecting compensatory payments of more than €10 billion for photovoltaics alone. That would mean more than half the entire compensatory payments for renewable energies. Acceptance of renewable energies in Germany will only remain intact if further increases in the Renewable Energy Law (EEG) levy are retained," was the view of CDU politics Michael Fuchs and Joachim Pfeiffer, expressed directly after the power grid operators had issued their middle-term prognosis for the EEG levy.
However, the environmental speaker of the FDP, Michael Kauch, swiftly rejected this demand in the name of his party. "The parliamentary FDP is not proposing a set cap," he said. It was only true that the Federal Ministry for the Environment had been assigned the task of finding out possibilities by which the "expansion of photovoltaics and other expensive technologies such as small biogas plants can be combined with the stabilization of the levy."
"The assignment specifically does not mention a set cap," Kauch went on. Much more importantly, the matter in hand is the sinking of the target range, currently at 3.5 GW, or an increasing degression if the target range is exceeded. Kauch also indicated that photovoltaic installations are also set to clearly exceed the given target this year.
Federal Minister of the Environment, Norbert Röttgen has already spoken at against a rigid cap on photovoltaics and pointed to the success of the "flexible cap", which envisages a degression in solar subsidy dependent on installations. "While promotion will, under the 'flexible cap', sink next year dependent on installation volume, an absolute cap leads to the cessation of subsidy upon said cap being reached. In this scenario, in future neither consumers nor the industry would have security of planning or investment," Röttgen declared.
In addition, the Ministry pointed to the largest reduction of costs in photovoltaics feed-in tariffs since 2008. As such, the subsidy for small rooftop installations had almost halved between the beginning of 2008 and that of 2012. In numbers, this means that photovoltaic feed-in compensation will be reduced this year from 46.75 to 24.43 euro cents per kilowatt-hour.
For open-space installations, a decrease from 35.49 to 17.94 euro cents per kilowatt-hour is to be observed. This showed the "potential for innovation and cost reduction for photovoltaics." In addition, the reduction of photovoltaic feed-in tariffs would continue in the future, meaning huge challenges for the solar industry.
"However, we don't wish to choke the photovoltaics industry. We wish to place it in a context in which it can responsibly develop in future," the statement from the Federal Ministry for the Environment went on. For this reason, the 2012 EEG amendment, which has already been resolved, should come into power before alterations are made once again.