24 May 2010
The German Bundestag is reducing the solar feed-in tariff (FiT), but it’s not all bad news for the solar industry.
The German Bundestag passed the amendment of the renewable energy law (EEG) with changes of the solar feed-in tariff (FiT) on May 6th. Says environment secretary Norbert Röttgen: "The amendment reflects the price cuts arising from the market introduction and mass production. It presents the necessary corrections to reduce the feed-in tariffs to an appropriate level, to limit costs incurred by the consumers while at the same time expanding the share of solar power in total power generation."
As of July 1st, FiT for solar plants on housetops is being reduced by 16%. FiT for open space installations will go down by 15%, while open-space installations now also include a 110 m wide strip along the kerbside of motorways or rail tracks. FiT for so-called conversion areas – this includes former industrial or military used land – will decline by 11 %. Instead, FiT for new solar plants on agricultural land has been reduced to zero.
Only self consumption will be awarded with a higher promotion: Private households and commercial installations up to 500 kilowatt (kW), which use more than 30% of their produced solar power for their own consumption, will benefit from a higher rate of up to 8 Eurocent per kWh. By this, the federal government hopes to boost technical innovation such as advanced batteries for small entities in order to store the generated solar energy.
Industry experts predict a huge demand for photovoltaic installations in the current year, due to the legal changes ahead. Says David Wedepohl, spokesman of the Bundesverband Solarwirtschaft (BSW), the interest group of the German solar energy industry: “We expect a high market growth in 2010, triggered by the FiT changes in the amendment and the vivid discussions about it the months before. Consumers and investors currently try to benefit of the old regulations. For the current year, we see a pull-forward effect and thus a rush demand.”
Yet, the industry association criticises the changes. Says Wedepohl: “This means a great challenge for the German solar manufacturing industry. It is hardly predictable what happens after the boom. The complete segment of agricultural land vanishes. We know that currently out of the open-air grounds in the country, 60% are agricultural, in Bavaria even 80 %.” The segment of open-air grounds holds a share of just under 20 % of all photovoltaic installations in Germany. Plus, the BSW-spokesman has concerns about the 30% rule on private consumption: “The 30% can be reached, but usually people are not at home while their photovoltaic plant on the roof produces at its full capacity.”
Other countries closely watch the FiT development in the largest European photovoltaic market, since German solar legislation has set standards beyond national boarders. The German government has already scheduled another cut in FiT by the end of this year. BSW thus demands to reassess the total sum of all reductions. “German solar companies must be able to gain enough profit to invest in research and development and in modern production facilities”, says Wedepohl.
While the amendment has passed the Bundestag two federal states – Thuringia and Rhineland-Palatinate – have announced to address the federal arbitration panel in order to discuss the level of reductions. However, the Bundestag does not need the approval to the legal changes from the second chamber, the Bundesrat.
Reported by Andreas Breyer for Solar Novus Today
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