The World's #1 Renewable Energy Network for News, Information, and Companies.

Germany Slashes FIT Subsidies in an Effort to Rein in Solar Power Installations

Solar power has grown so massively in Germany that the government now plans to rein in the boom in photovoltaic installations by cutting generous subsidiaries.

On Thursday, after reaching an agreement with the Economics Minister Philipp Roesler, German Environment Minister Norbert Roettgen announced the most severe wave of subsidy cuts since the government began supporting solar energy in 2004.

The move comes after a further massive expansion of solar power production capacity in Germany last year and the associated costs for consumers who, in the end, pay for the above-market rates of renewable energy.

The government of German Chancellor Angela Merkel, who aims to replace nuclear power plants with renewable energy, has proposed cuts of 20 to 29 percent. They're deeper than the 15 percent reduction ordered in January and they're a month earlier than planned.

Among the key changes:

  • systems up to 10 kW will be subject to a 20.2 percent reduction to 19.5 euro cents per kWh;
  • systems from 10 to 1,000 kW will face a 25 and 29 percent reduction to 16.5 euro cents per kWh:
  • systems larger than 1,000 kW will see an approximate 26 percent reduction to 13.5 euro cents per kWh;
  • subsidies for systems over 10,000 kW will be dropped entirely in the future;
  • new small systems will only be remunerated for 85 percent of the electricity produced, while middle-sized and large systems will receive remuneration for 90 percent.

With its proposed changes, the government hopes to contain new capacity to between 2.5 and 3.5 gigawatts this year and next year, down from 7.5 gigawatts in 2011.

From 2014, the government targets a yearly reduction of 400 megawatts and from 2017 between 900 and 1,900 megawatts.

Germany is hardly alone in its efforts to contain costs for supporting the nascent solar power industry: France, Italy, Spain and the United Kingdom are equally tweaking their subsidies to align with falling solar panel prices and control the explosive growth.

In Germany, solar prices plunged more than 45 percent last year, due largely to rising Chinese competition.

Not surprisingly, the German government's proposals have drawn hefty criticism from the solar energy industry.

First-Solar manager David Wortmann called the cuts "a slap in the face." First-Solar is specialized in supply systems for large open spaces. His competition agrees. Phoenix-Solar CEO Andreas Haenel said the large-space market segment would be "strangled."

Carsten Koernig, head of the German solar industry association BSW, warned that thousands of jobs were in danger. Dietmar Schuetz, president of the German Renewable Energy Association BEE said the subsidy cuts represented nothing less than "an attack on the renewable energy law."

Nor are all politicians pleased with Merkel's move. Juergen Trittin, head of the Green Party parliamentary fraction, called the cuts "unreasonable" and said they carried the signature of Merkel's pro-business coalition partner, the FDP, which has shown less interest in supporting renewable energy.

The proposals will go to the cabinet next week and then on to lawmakers.

RELATED ARTICLES

Rooftop Solar Panels

Hypocrisy? While Buffett Champions Renewables, His Company Fights Rooftop Solar

Mark Chediak, Noah Buhayar and Margaret Newkirk, Bloomberg Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power.
Japan Microgrid

Born from Disaster: Japan Establishes First Microgrid Community

Junko Movellan, Correspondent Although Japan's Fukushima prefecture is most commonly associated with the 2011 disaster due to the nuclear power melt-down, Miyazaki prefecture, located north of Fukushima, suffered from the largest death toll, close to 10...
Renewable Energy Finance

Clean Energy ETFs Are on a Tear

Eric Balchunas, Bloomberg Green investing used to be synonymous with losing money. But while the S&P 500 Index is up 2 percent this year, and the MSCI All-Country World Index is up 5 percent, clean energy ETFs have double-digit re...

Wheels, Towers and Trees: Unconventional Renewable Energy Technologies in the Pipeline

Andrew Williams, International Correspondent A number of companies around the world are developing novel technologies in an effort to grab a slice of the global renewable energy market.  Although many of these technologies are simple incremental improvements to e...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

EU PVSEC 2015 (European PV Solar Energy Conference and Exhibition)

The EU PVSEC is the largest international Conference for Photovoltaic re...

CA Wine Industry's 2015 Solar Update- WEBINAR

Proceeds from event registration will go to the CA Sustainable Win...

Energy Security: Opportunity Power with the Sunny Boy Secure Power ...

Wouldn’t it be great to have a grid-tied inverter that could still...

COMPANY BLOGS

EU PVSEC 2014: Call for Papers Receives Great Response

More than 1,500 contributions apply for presentation in AmsterdamScienti...

EU PVSEC 2014 extends its Scope

Added focus on application and policy topicsAbstracts for conference con...

Boulder County Residents Generate Their Own Energy with Community S...

Despite a soggy afternoon, solar energy advocates gathered at ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS