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Stalemate on German FIT cuts

Bloomberg has reported that changes to Germany’s photovoltaic support program, introduced to the German parliament by Chancellor Angela Merkel’s government, may not go through, after negotiations with the parliament’s upper house broke down.

The proposed changes to photovoltaic support have stalled in the German parliament's upper house.

Major changes to Germany’s FIT regime have been a keenly debated topic in the country’s politics since first proposed in February and approved by the lower house of parliament in March. The German photovoltaic industry has been protesting the changes since they were unveiled.

The German parliament’s upper house, the Bundersat, has stood in opposition to the changes, with representatives fearing the effect they will have on local employers in the sector. The Bundersrat called for mediation on the matter, and this week’s arbitration panel meeting has failed to reach an outcome.

On the back of this stalemate, Bloomberg has reported that the cuts may not go through, as agreement on key parts of the proposal were not reached.

The stress already on the German photovoltaic manufacturing industry is already pronounced, with a host of companies in insolvency and questions being asked about a host of others. Other manufacturers are winding back operations in Germany, with First Solar also announcing it is closing operations in the country – although they will remain open until the end of the year.

Alexander Kirsch, CEO of Germany’s Centrosolar, spoke out against the cuts on Deutsche Anleger Fernsehen – a German TV station with a focus on business and the stock market – today. Speaking about the proposed FIT changes, Kirsch said: "This is the government going too far and it will also damage the healthy part of the solar industry [which is still] strong."

Kirsch added that the perception that the entire semiconductor industry will move to Asia is incorrect. He said that because solar modules are big and bulky, there would always be cost advantages of production close to market.