German PV funding compromise

The German solar industry association or BSW-Solar has come to an agreement with the German Federal Ministry for the Environment on a new compromise on PV funding. Future feed-in tariffs are to be adjusted accordingly with annual installed capacity. Possible cuts will be brought forward to 1 July this year.

The expected installed capacity for this year will be based on the new installations between March to May. The Federal Net Agency will derive the projected estimated installed capacity for 2011 by multiplying the March to May result by a factor of four.

If the calculated PV market capacity exceeds 3,500 megawatts, the sector can expect further cuts of three percent in July. Should projected capacity be over 4,500 MW, a six percent cut can be expected. Annual installed capacity of over 5,500 MW would call for a further nine percent cut. A figure over 6,500 MW will mean twelve percent and an installed capacity of over 7,500 MW like last year, will be subject to a 15 percent reduction.

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 conclusive decision is expected in February. Market experts are predicting an artificial stimulation of the market and warn against a misinterpretation of the possible pull-forward effects.

Markus A.W. Hoehner, CEO of EuPD Research states that this modification is a step in the right direction for the German industry whose market is apparently threatened by excessive growth without any adjustments. However, a successful run in the first half of the year can possibly cushion and overcompensate the slower development of the sector in Germany after the adjustments take effect.