New Hampshire, U.S.A. -- Just as Germany announced its intentions to maintain its current feed-in-tariffs rates to bolster softer than projected figures, a key player in the U.S. solar market may take a different approach and cut into its incentive program.

The approaches highlight the often stark tacks taken by German and American policymakers as both economies negotiate their way through a turbulent global economy. In Germany, the feed-in-tariff is seen by many policy leaders as a way to foster economic growth while promoting energy independence. In New Jersey, America’s second biggest solar market, the governor is hoping to bring down electricity rates for all while making the case that the solar industry no longer needs its current support structure.

Germany saw 700 MW of new solar PV capacity added to its grid in March, April and May. Factored over the course of a year, the 2,800 MW of new capacity would fall short of the 3,500 MW threshold set last year. As a result of the weaker projections, German officials have decided not to scale back the tariff on July 1 as they did last year.

Germany, the world’s largest solar market, saw a 39 percent decline in new capacity and a 51 percent drop in new plants during the three months compared to the same time last year -- and it’s a trend that can be seen across the nation.

“We expected a weak start to the year,” said Till von Versen, an analyst at consulting and research institute EuPD Research. “However, present figures underperformed expectations.”

The main indicators for the slow start are decreasing prices of modules.

“Customers postpone their installations from one month to the next in the hope that prices will decrease,” said von Versen.

EuPD Research expects a significant increase in reported output for the month of June, accelerated by Germany’s decision to leave the FIT rates where they are.

In New Jersey, meanwhile Republican Gov. Chris Christie’s administration is questioning some of the policies that have helped drive industry growth in his state. These are questions, he says, the state must ask in light of a struggling economy.

New Jersey’s 2011 Energy Master Plan (EMP), recently released by Republican Gov. Chris Christie, maintains its existing renewable portfolio standard (RPS) at 22.5 percent by 2021.

According to the EMP, solar installations in New Jersey are second only to California. The state now has about 9,000 solar PV projects with 330.5 MW total capacity statewide. The majority of these projects have come online in the past three years. The strong growth has come as a result of the state’s aggressive strategy. Solar incentive programs require that New Jersey’s electric distribution companies and load-serving entities purchase or produce solar renewable energy certificates (SRECs) to meet their respective solar energy obligations.  

One SREC is equal to one megawatt-hour (MWh) of solar energy that was generated in the state.  SREC prices are determined by market demand.  The SREC floor price, however, is tied to the Solar Alternative Compliance Payment (SACP), which is essentially a penalty utilities must pay to the state for each MWh of solar electricity that they fall short of in their portfolios. 

Recently, the SREC supply has outstripped demand, driving prices down significantly. The governor’s report shows that the state, which had up until now the most agressive solar target in the U.S., may be cooling to the current support structure.

“The goal of incubating solar technology has been met. New Jersey’s Solar Alternative Compliance Payment (SACP) is, by far, the most generous in the nation. The solar industry is no longer fledgling – it has grown in leaps and bounds across the U.S., Europe and Asia.”

The report recommended reducing the SACP by "20% in 2016 and then reduce the annual SACP by 2.54% each year thereafter, in order to reflect the continuing trend in installed cost." Christie’s administration said that cutting the SACP “will not undermine new solar projects that are worthwhile, but will reasonably minimize the cost burden borne by non-participants throughout the Garden State.”

It’s the “non-participants” or ratepayers in general, which the report says should be protected from higher energy prices.

“The Christie Administration does not support the unreasonable transference of wealth from ratepayers at large to solar developers as well as residential, commercial and industrial participants,” the report reads.

“To avoid the creation of a financial albatross, the Board needs to re-evaluate the costs and benefits of existing solar policies to ensure that New Jersey’s residents, particularly non-participants, are receiving economic and environmental benefits in return for the financial support that has fueled rapid solar penetration in New Jersey.”