German Government, Solar Group Reach Agreement On FIT Reductions

Representatives from BSW-Solar, Germany's solar trade association, and the country's government have reached agreement on the adjustment of solar feed-in-tariff (FIT) rates. Future FIT rates will be adjusted in accordance with annual installed capacity, reports Germany-based market research firm EuPD Research, and possible cutbacks will be implemented July 1.

The expected installed capacity for this year will be based on the figures for new installations in the period from March to May. By multiplying the result by a factor of four, the Federal Net Agency will then project the estimated installed capacity for the year.

Should the calculated PV market capacity be more than 3,500 MW, further reductions of 3% will be introduced mid-year on July 1. The resolution reached between legislators and BSW-Solar has determined that a cut of 6% will be put in place if projected capacity is over 4,500 MW. Projected annual installed capacity of over 5,500 MW would incur cuts of a further 9%.

If projected annual capacity is more than 6,500 MW, a 12% cut will be implemented. If installed capacity is projected to reach last year's total – 7,500 MW – a 15% reduction will be put in place. Ground-mounted projects will not be affected until Sept. 1.

Funding is, as previously planned, to be cut by a further 9% at the beginning of 2012, EuPD Research adds. Furthermore, an audit carried out by the Federal Net Agency will verify that the estimations made in spring 2011 are accurate, and corrections will be made if necessary.

‘The German PV market is still overheated, and the reoccurring discussion on amendments to incentives fuels this situation further,’ comments Markus A.W. Hoehner, founder and CEO of EuPD Research. ‘Germany currently finds itself in a dilemma. Without further adjustments the market is threatened by excessive growth, a point which speaks for the measures suggested.

‘Yet a run in the first half of the year is likely to overcompensate for the slowdown effects of said adjustments,’ he continues.

A final decision on this plan is expected in February.

SOURCE: EuPD Research


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