EU PVSEC business forum discusses partnerships, mergers and subsidies08. September 2011 | Top News, 26th EU PVSEC, Industry & Suppliers, Markets & Trends | By: Jonathan Gifford
For the first time, photovoltaic industry leaders have come together at a EU PVSEC conference to discuss future business models.
At a trade show where much of the talk has been about falling photovoltaic prices, industry leaders and analysts have come together to discuss the shape the industry will take over the coming years.
The EU PVSEC Business Forum featured four presentations and a panel discussion, and attracted a good audience. While the discussions ranged across a wide range of issues, the ways in which governments support photovoltaics was a major theme.
There was general agreement that the industry must become more effective at lobbying for support and for reduction of subsidies for traditional energy sources, like fossil fuels or nuclear. At the same time, an "exit strategy" from a reliance on European feed-in tariffs (FIT) was raised by Swiss equipment manufacturer Meyer Burger’s CEO, Peter Pauli.
Picking up on the theme, Maja Wessels from First Solar agreed strongly and expanded on his comments. "Certainly the experience in the United States has been that anything that effects government spending, there’s a potential for that to disappear overnight."
The effects of sudden legislative changes have been profound on the industry in recent years particularly in the boom and bust of the Spanish and Czech FIT-driven markets.
"That is the worst thing that can happen in the industry," continued Wessels. "Going forward what is necessary is a solar energy mandate, that has worked so well in California. The utilities have a mandate, they then negotiate Power Purchase Agreements (PPAs), they then have the incentive to keep the costs low."
This mechanism, argued Wessels, has helped prevent situations like those seen in some European markets, where the FIT was not reduced in line with cost reductions. This then led to big profit margins and the subsequent boom-and-bust cycle. The mechanism also encourages innovation on the finance side, such as the solar lease schemes, which are flourishing in the U.S.
Meyer Burger’s Pauli favored tax concessions, such as those seen in his home country of Switzerland.
However, IHS iSuppli’s principal analyst, Henning Wicht, did explain a nuance in the way FITs impact households in Germany.
"The additional cost for the typical household [to pay for the FIT] in Germany has gone from €40 per household, per year in 2008, up to €100 or €120 today. If the household would change its traditional energy supply, it would save at least €250 per year."
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