Germany plans PV FIT cap for modules

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At the moment, negotiations about solar subsideis between the Federal Ministry of Economics are at their zenith. Meanwhile, it seems to be quite probable that cuts to photovoltaics feed-in tariffs (FITs) staggered across the year could be brought forward and after that a monthly, low, single-figure degression implemented. This is in order to avoid year-end surges as seen in, for example, December 2011.

However, indications have been strengthening for several days that the Federal Government is also seeking to implement a cap on FITs for photovoltaic modules. According to sources close to negotiations, a subsidy limit figure of a maximum between 800 and 900 kWh could be placed on the annual yield per installed kWp. In Germany, the average photovoltaic installation produces, at good locations, up to 1,150 kWh per kWp annually. The quantity of solar electricity produced beyond this limit would then, the proposal envisages, be marketed by the module operators themselves.

Apparently the Federal Ministry for the Environment is the author of the new solar subsidy proposal. The Ministry itself did not comment to an enquiry about the state of negotiations. It only confirmed that, at the moment, at all levels, high-pressure negotiations were taking place.

Next up are discussions between Minister Norbert Röttgen, Christian Democrat (CDU) and Philip Rösler of the Liberals (FDP). By the end of February, at the latest, a proposal about photovoltaic tariffs should be on the table.

The Germany Solar Industry Association (BSW-Solar) commented that it did not know about said proposal and furthermore that it would meet with a "clear rejection". "From the current position, being able to count on marketing surplus amounts of electricity is hardly imaginable in the photovoltaics industry. In the future, too, energy exchanges look unlikely to be able to give an accurate account of the value of solar electricity.

"In addition, in political terms, the current form of market and management bonuses will presumably not be maintained, as these create considerable windfalls without easing the burden on the consumer," said Carsten Körning, managing director of BSW Solar.

The legislation being discussed conceals many pitfalls and uncertainties for photovoltaic plant operators. It would likely be difficult for the operators of small and medium installations to market amounts of surplus solar electricity. In addition, with the law, income from yields would no longer be able to be planned upon. And as such, financing modules would become more difficult.

A further factor would be that the Federal Government would, with this new rule, step into conflict with the Renewable Energy Law (EEG) as currently understood, and also no longer encourage the improvement of efficiency and quality in modules and inverters. In fact the new legislation would encourage the use of cheap modules and inverters, which would probably largely originate from Asia.

In addition, such legislation would make, in the future, the sound planning and maintenance of photovoltaic installations unattractive. Again, it would be above all smaller and medium-sized companies in Germany which would be affected by the proposed law. For them, countless contracts would fall through.

A spokesperson of the Ministry of the Environment said that Minister of Economics Phillip Rösler’s continually referenced figure of 33.3 gigawatts (GW) of installed photovoltaic capacity by 2020 was not based on the Federal Government’s Energy Concept 2010. In fact it apparently relates only to a potential scenario.

The only binding figure for photovoltaic installation in the country is based on the National Renewable Energy Action Plan. In this, the Federal Government had stated to the European Commission in Brussels that it was expecting an installed capacity in Germany of 51.75 GW by 2020.

Translated by James Harris.