Germany’s BSW: Meetings “constructive” on solar PV cuts vs. caps

The latest meeting (Jan. 19) between German government officials and solar industry representatives “was open and constructive,” as both sides mull different ways to manage the country’s solar PV market to keep the momentum going for integrating renewable energy sources, but without imploding future growth.

January 23, 2012 – After seeing PV installations race past projections in December, which will very likely ratchet up the planned cutbacks in FiTs in 2012 — 15% in July, plus the 15% in Jan = 30% Y/Y — German officials are mulling different ways to manage the country’s solar PV market to keep the momentum going for integrating renewable energy sources, but without imploding future growth.

On the table are both reduced FiTs and a hard cap on new installations. Economy Minister Philipp Rösler had initially backed a 1GW cap, which Environment Minister Norbert Röttgen opposed in favor of several stepdowns in subsidies, instead of the larger half-year ones.

The Bundesnetzagentur (BSW, Germany’s utility and infrastructure regulatory agency) says the latest meeting (Jan. 19) between government officials and German solar industry representatives “was open and constructive,” with particular attention paid to how costs have been reduced through both technical innovation and scaling to mass production. A 50% reduction in PV costs over the past three years has been matched by a reduction in subsidies.

Solar currently contributes ~3% of Germany’s electricity toward a goal of ~10% by 2020, noted Carsten Körnig, CEO of the German Solar Industry Association, and over the next five years could rise to around 7%, vs. a 2% increase in private electricity tariffs (citing Prognos calculations). And as prices continue to fall faster than subsidies, by 2013-2014 solar could match support levels of large ocean-based wind farms in initial market segments.

Still, both sides have to come to agreement about what to do. One report quotes Rösler criticizing the “glaring disparity” between solar PV’s subsidies vs. the power it actually contributes (Handelsblatt says solar gets half of all renewable energy subsidies despite making up barely 3% of renewables’ 20% contribution to the grid.). Another says Germany’s Energy Agency (DENA) agrees that continued adjustment of the subsidies “is no longer enough.”

Where everyone seems to agree is that Germany must maintain its global leadership in both policy and use in solar PV. The BSW points out that “continued robust expansion of the use of solar power is essential” to Germany’s energy system, and that it “enjoys broad support from the population at large.” And it’s becoming even more affordable; Maxim analyst Aaron Chew projects by year’s end the projected lowered FiT rate could drop below electricity rates (?0.20/kWh), and “ultimately guide Germany to a grid parity model.”

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