2010 French Tariffs Raise Price for Solar, Geothermal and Biomass

Solar advocates warn of overheating the French PV market.

Paul Gipe, Contributor
February 03, 2010 | 7 Comments

France has introduced new feed-in tariffs for 2010. These include substantially higher geothermal, biomass, and building integrated solar PV tariffs than in 2009.

Media reports of the new solar PV tariffs have overshadowed the significantly higher tariffs for geothermal-electricity generation, and for biomass. Sex sells, and solar PV remains "sexier" than humdrum geothermal power plants and downright old school biomass plants.

Tariffs for wind energy have remained unchanged since 2006 except for increases due to inflation.

In an odd twist, English-language media is widely reporting a "24% cut" in French solar PV tariffs while French sources are warning that some of the tariffs have been raised too high.

For the most part the tariffs announced by Minister of Energy and the Environment, Jean-Louis Borloo, reflect those published in late 2009. See Conservative French Government Again Proposes Higher Solar PV Tariffs.

Biomass Tariff Doubled

Borloo has more than doubled tariffs for biomass from €0.064/kWh to €0.125/kWh [$0.18 USD/kWh]. He also raised the efficiency bonus to €0.05/kWh [$0.07 USD/kWh].

Geothermal Tariff Raised Nearly 70%

The geothermal tariff in continental France was raised nearly 70% from €0.12/kWh to €0.20/kWh [$0.29 USD/kWh]. The geothermal tariff for French overseas territories, several of which have significant geothermal potential, was raised 30% from €0.10/kWh to €0.13/kWh ($0.19 USD/kWh).

BI Solar PV Tariff Highest in World

Borloo is claiming that France has instituted the highest solar PV tariff in the world. The tariff for building-integrated (BI) solar PV installed on occupied dwellings and buildings housing health care is €0.58/kWh [$0.84 USD/kWh]. For all other buildings, the BIPV tariff is €0.50 [$0.72 USD/kWh].

The ministry made other changes in PV tariffs as summarized below.

    * BIPV (dwellings and health care): €0.58/kWh [$0.84 USD/kWh]
    * BIPV (other buildings): €0.50 [$0.72 USD/kWh]
    * Simplified BIPV: €0.42 [$0.61 USD/kWh]
    * Ground-mounted PV <250 kW: €0.314 [$0.45 USD/kWh]
    * Ground-mounted PV >250 kW
          o In the Sunny south: €0.314 [$0.45 USD/kWh]
          o In the cloudy north: €0.377 [$0.58 USD/kWh]
    * Inflation Indexing Reduced to 20%
    * No degression until 2013

English-language media has focused on the tariff for "simplified building-integrated PV" that was decreased from €0.55/kWh to €0.42/kWh, a 24% reduction. However, "simplified BIPV" in France was never the type of rooftop PV seen in Germany or anywhere else in the world. In a uniquely French approach, the PV must be integrated into the roof of the building not just mounted on top.

In contrast to English-language media's reporting, French solar advocates have warned the government that the tariffs for ground-mounted and BIPV are too high. They warn of a potential "solar bubble" like in neighboring Spain in 2008 and instead have called for more "sustainable tariffs" and for a program more aimed at residential and commercial buildings than the current program.

Both Hespul and CLER (Comité de Liaison Energie Renouvelables) have charged that the current program, while creating a risk of a speculative solar bubble, focuses too narrowly on a niche market for new buildings. Hespul and CLER emphasize that the potential of solar in France atop existing buildings is vast.

The two advocacy groups argue that a "good" tariff is one that permits generators to earn a profit from their investments and enable increasing electricity generation in a "sustainable" manner. Hespul and CLER charge that France's BI tariffs are not sustainable and will account for a large portion of the costs of the French feed-in tariff program in the years ahead.

Hespul warns that the BI tariffs are so attractive that they will lead to the construction of building shells that will house nothing but support a BIPV roof to take advantage of the high tariffs. Such abuses have been seen in southern Italy.

For updated tariffs worldwide, see Tables of Feed-In Tariffs Worldwide.

Photovoltaïque : Publication du nouvel arrêté tarifaire

Photovoltaïque: l'arrêté sur les conditions d'achat de l'électricité

Hespul & CLER--La " bombe photovoltaïque " : un alibi bancal pour une politique boiteuse

Hespul--Revision des Tarifs d'Achat Photovoltaiques : analyse et propositions de l'association Hespul

Note: This analysis is based on my limited knowledge of French.--Paul Gipe

7 Comments

Lisa Feder
February 14, 2010

To Ron and Brian,

well, the french FiT, and especially the modulation for solar farms where the FiT is higher in the north than in the south has been crafted exactly for what you write : to make PV systems also attractive in the northern part of the country ... don't forget that PV works with "light" (with "sun" or not).
However, the government decided this only for solar farms, not for BIPV or other rooftop PV systems, making it quite suspect ... Why ? because it's clearly to keep them off the roofs in some areas.

Re. EDF Energies nouvelles : Yes, they have been active for quite a time already, in France and also in Canada, for example.
Last press release :
http://www.edf-energies-nouvelles.com/admin/upload/communique/PR_2009AnnualResults_100210_ENG.pdf

Brian Ballek
February 10, 2010

Ron,

Yes, this is a really interesting aspect of the French FIT. France could have made a much simpler FIT, that would naturally favor the sunnier areas and possibly make solar power unattractive (at least for a while) in shadier, cooler parts of the country. Instead, France chose to set a base tariff and a multiplier (from 1 to 1.2 depending on the county), that surely makes the program more complex and more costly to administer. I highly doubt that decision was made lightly.

Was it to spread opportunity for solar developers evenly throughout the country in keeping with their egalitarian philosophy? Or do they hope to accelerate the growth and maturation of the industry (manufacturing, system integration, installers, financial players, etc.) by making solar visible and profitable all over the country rather than spreading slowly from the South?

I suspect it actually has to do with the high share of nuclear power in their power generation mix. France gets something like 80% of its electricity from nuclear reactors, which generally must deliver a constant output - they can't modulate output up and down to match swings in demand...or in supply from renewables. If utilities are obligated to take all power generated from PV, then a sudden explosion in solar power generation capacity in the South would create an increasing risk of power oversupply there on sunny days. That risk could be dealt with to some extent by exporting power to other European countries but in a pinch, nuclear power plant operators might actually have to *pay* large customers to consume the surplus power in order to avoid shutting down one or more reactors. Making solar power equally attractive nationwide ought to avoid this problem in any one region of France, at least in the short term.

Note: EDF (Energie de France) is becoming very active in solar and recently signed large solar module supply agreement with the USA's First Solar, which is now planning a 100 MW factory in France.

Ron Peterson
February 9, 2010

The FIT isn't designed right to encourage the best investment. Solar should be developed in the south of France, but the FIT equalizes the the payout instead.
Wind turbines, on the other hand, will be better for the north of France, except for a small area near the Mediterranean.

Lisa Feder
February 6, 2010

Sorry ... but it looks like your limited knowledge of French ends with this article twisting the truth ... not the european or the french Media, to whom I belong too !
It's wrong to title "2010 French Tariffs Raise Price for Solar ..."

In fact, with the new "arrêté" published mid-January 2010, the highest possible PV feed-in-tarif of roughly 0,60 €/kWh hasn't changed, but the BIPV is now even much more restricted than it already was under the old law from 2006 ... and, much to the dismay of most of the actors in the area, it's not accessible for new buildings (less than 2 years old) or for industrial buildings, etc. In the same order, the lowest FiT for ground-mounted solar farms hasn't really changed, it's still roughly 0,30 €/kWh, but there is a premium for a higher tarif in the northern regions (which, by the way ends with in some areas the ground-mounted solar farms being financially more interesting than the simplified BIPV explained below).
Also, no french solar advocates have warned of a bubble, it's the government (or most probably EDF) who has seen a bubble with something like 3 or 4 GW of cumulated power in projects announced/deposited in Nov+Dec 2009, which would have profited from the old, better, tariffs but for the new "law" making an exception in taking this period (actually until January 11, 2010) out of the scope of the old FiT and resquesting the papers of these planned projects to be re-crafted for the new FiT. Also, under the old FiT, the french solar advocates called for an intermediate FiT between the BIPV and the ground-mounted solar farms,which has been crafted into the new FiT law, with the 0,42 €/kWh for the so-called "simplified BIPV", which is still nothing like the simple rooftop mounted PV systems you can see elsewhere (making the investment higher, therefore justifying the still relatively high FiT).
I simplified a little but, anyway, your article is wrong, or at best partial and unclear.
Detail : I'm not an advocate of high PV FiTs.

michael macrumpton
February 6, 2010

The article title implies that the cost of installing Solar, Geothermal and Biomass is going up, while if I am understanding it correctly the amount the Solar, Geothermal and Biomass facility owners are being paid for power is what is going up. I am guessing that this would make it easier for people to get a loan to install a generating facility since the guaranteed income/watt would be larger.

Mike Holly
February 5, 2010

The EU provides all projects of all renewable energy companies with feed-in tariffs, guaranteed fair prices for all generation. All independent companies get oppotunities.

The US forces renewable energy companies to bid for projects and prices from utility monopolies that favor themselves, their affiliates and friends during bidding. Most independent companies get no oppotunities.

Thanks for nothing America!

Jonathan Chance
February 4, 2010

Public treasuries can allow a free and fair market-based economy by issuing inflation-resistant, usury-free, technology-neutral, Renewable Energy Credits (RECs) - like United States Notes - directly to individual (legally transparent) citizens (prosumers):

JPChance.wordpress.com

United States Renewable Energy Credits (US RECs) and United States Peak Renewable Energy Credits (US P-RECs) shall be directly issued to individual United States citizens, age sixteen (16) years or over, who are owners of certified renewable energy (RE) systems.

US Renewable Energy Credits (RECs) and US Peak Renewable Energy Credits (P-RECs) shall be lawful tender for any and all claims of debt, public and private.

One ($1) US Renewable Energy Credit (REC) represents twenty (20) kilowatt-hours (kWh) of certified renewable energy (RE) produced within the United States of America ($1 REC = 20 kWh RE).

One ($1) US Peak Renewable Energy Credit (P-REC) represents ten (10) kilowatt-hours (kWh) of certified grid-tied peak-demand photovoltaic (PV) electricity produced within the United States of America ($1 P-REC = 10 kWh peak-demand RE).

Certified renewable energy for US Renewable Energy Credit (REC and/or P-REC) shall be derived only from environmentally benign photovoltaic (PV) systems, grid-tied solar-thermal electric systems, grid-tied solar water heating systems, grid-tied wind power systems, grid-tied hydroelectric systems, grid-tied closed-loop geothermal systems, cellulosic ethanol and/or organic vegetable oil.

The Treasury shall issue no more than three thousand ($3000) US Renewable Energy Credits (RECs and/or P-RECs) to each individual United States citizen, age sixteen (16) years or over, per month.

US Renewable Energy Credit (REC and/or P-REC) shall be taxable at a total rate no higher than fifteen percent (15%) to be shared equally among the federal, state and local governments of the locations where the certified renewable energy is generated.

JPChance.Org

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Paul Gipe

Paul Gipe has written extensively about renewable energy for both the popular and trade press. He has also lectured widely on wind energy and how to minimize its impact on the environment and the communities of which it is a part. For his...