Germany has announced lower solar photovoltaic (solar PV) tariffs for 2012 and the industry has taken the expected step in stride.

The German network agency, the Bundesnetzagentur, announced the new feed-in tariffs for solar PV as part of automatic adjustment of the tariffs based on the amount of solar capacity being installed. Because of continued strong growth in solar PV installations, the new tariffs are 15 percent less than those in 2011.

The German solar industry association, the Bundesverband Solarwirtschaft (BSW), applauded the much anticipated action. "The solar industry has delivered on its promise of delivering more and cheaper solar electricity," said Carsten Körnig, the association's executive director.

The new tariffs maintain Germany's lead as the most rapidly developing market for solar PV at the least cost. Further, the new tariffs bring German solar PV within striking distance of "grid parity," once the holy grail of the solar PV industry — now just another milestone on the way to massive deployment.

Since 2004, German solar PV tariffs have declined by more than 57 percent in effect driving world solar PV prices toward grid parity.

2012 Solar PV tariffs in Germany will rival those for offshore wind. Germany pays offshore wind turbines €0.15/kWh ($0.20 USD/kWh). If offshore projects are installed by 2018, they also receive a "sprinter" bonus bringing total payment to €0.19/kWh ($0.26 USD/kWh). Solar PV installed on brownfield sites in Germany will receive about the same payment as those for offshore wind with the sprinter bonus. However, if the solar project falls into the "other" category in the German system of differentiated tariffs, they will be paid €0.18/kWh ($0.25 USD/kWh), one € cent less than offshore wind.

The equivalent German tariff for solar PV in California — after adjusting for California's greater solar insolation — would be $0.16 USD/kWh.

The new tariffs were determined by the network agency after analyzing solar PV growth for the fiscal year through the 3rd quarter of 2011. Through September, Germany has installed nearly 3,400 MW from 130,000 systems in the calendar year. At the current rate of growth, analysts expect Germany to install as much as 5,000 MW of solar PV by the end of the year. The Solar Energy Industries Association (SEIA) expects the US to install up to 2,000 MW in 2011. Industry analysts expect China's 2011 installations to rival, if not exceed, those in the U.S.