Large-scale photovoltaic project developer, solar hybrid has said that its "entire business model has been called into question", and its financial position compromised following the proposed changes to Germanys legislation which, if introduced, will see a tariff cap of 10 MW placed on projects.
Of particular concern is the "loss of the possibility of financing through capital market measures (share capital increases and the issue of bonds) or the possibility of financing through bank loans, reduction or loss of credit ratings, etc." Specifically, it says that advanced negotiations for the implementation of "significant" financing measures are "under threat".
"Until yesterday [March 6], solarhybrid AG had planned the issue by way of private placement with institutional investors of a bond for the financing of the acquisition, agreed in February 2012, of the US activities of Solar Millennium AG and of the Italian Vega project. The Management Board is currently reviewing alternative financing for these projects and is involved in tangible negotiations in this regard," it said in a statement released.
Solar hybrids 150 MW project is also in jeopardy. It said there is "no possibility" of realizing its Neuhardenberg project. "While indeed the decision on the binding site plan is dated 16 December 2011, nonetheless the duration of a binding site plan and authorisation procedure must be set at a minimum of seven months, so that the commencement of construction was planned for mid-2012 and completion for the end of 2012," it said. "Thus, the EEG refunding capacity would cease. This would mean a loss of investments made thus far in this project in the amount of approximately 7.5 million."
It went on to say that there is "limited possibility" to realize its Allstedt II project, and "no more EEG-compliant realization possibility" for its Belling, Allstedt III and Fürstenwalde II projects, which will result in a loss of investment of around 4 million.
Due to the current uncertainty, the company also does not believe it will be able to publish its 2011 audited consolidated annual report in March.
In related news, Parabel, and its investors, have said that they will carry on with construction of the 40 MW Jännersdorf photovoltaic project which began two days before the government announced its planned FIT changes despite the risk that it cannot be completed in time.
In a statement released, Jürgen Will, CEO said, "In the case of ground-mounted systems greater than 10 MW, we assume that there will be appropriate transitional periods for projects that are approved or already ongoing.
"Our project had a pre-planning phase of one and a half years. We have had planning permission since December 2011. There is therefore a risk that waiting for changes in legislation to be determined would delay the construction to such an extent that it would no longer be possible to complete it even with new transitional periods."
The new photovoltaic FIT plan is set to be presented before Germany's parliament presently. According to IHS iSuppli's Henning Wicht, there is hope that changes will still be made to it. Already the March 9 deadline, whereby the tariff and plant size changes were originally scheduled to come into effect, has been pushed back. However, the industry is furious about the changes. On Monday, around 12,000 people gathered in Berlin to protest, and EPIA's president has written an open letter to Chancellor Merkel, outlining the damage the new FITs will have on Germany's solar industry.
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