German Ministers Officially Propose Solar Incentive Cuts

Germany’s Economic and Environmental Ministers have just announced their compromise plan to reduce support for solar PV in Germany going forward. Their recommendations more or less match what’s been circulating in the news for the past couple of days. Here are the highlights (and the official publications in German):

  • Category types under EEG to be changed to: < 10 kW rooftop installations, rooftop installations up to 1000 kW, and large (rooftop/ground) installations from 1-10 MW. Larger systems would not receive FITs at all.
  • One-time 20-30% reduction in FIT rates, effective March 9th, to: 0.195€/kWh (small systems); 0.165€/kWh (medium); 0.135€/kWh (large).
  • Additional monthly reductions of 0.15 €ct/kWh, starting May 1st.
  • FIT rates only provided for 85% (small systems) or 90% (medium/large) of electricity produced. The remainder can be consumed onsite or sold on the electricity market. To go into effect for systems installed after 9 March, starting in January 2013.
  • Self-consumption bonus (for electricity immediately used onsite) eliminated altogether.
  • Permission granted to the government to make changes to the monthly FIT rate reductions on short notice, if the target growth corridor is under- or over-shot.
  • Reduction in the target growth corridor (currently 2.5-3.5 GW/yr) by 400 MW each year, from 2014-2017. Starting in 2017, the corridor would be fixed at 0.9-1.9 GW/yr.

However, the recommendations still have to be adopted by members of Parliament in order to go into effect, and there is already significant pushback, with protests around the country.

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Joanna Gubman is a 2011-2012 recipient of the German Chancellor Fellowship for Prospective Leaders. She is spending her fellowship year at the German Solar Industry Association, BSW-Solar , exploring incentive and business model alternatives as the German market achieves grid parity. Previously, Gubman was a Managing Consultant in the Energy Efficiency group at Navigant Consulting. There she analyzed technologies and policies to improve energy efficiency, including analysis and implications of the CPUC Long Term Energy Efficiency Strategic Plan (net zero energy new buildings and widespread adoption of whole-house retrofits); identification & promotion of emerging technologies for utility energy efficiency incentive programs; and development of corporate sustainability initiatives. She also served as project manager for the California Sustainability Alliance. Gubman received her B.S. and M.S. degrees in Mechanical Engineering from Stanford University. You can find her online on LinkedIn , Twitter ( @JoannaGubman ), and xing , and via email at . The views she expresses here and elsewhere are her own, and do not reflect those of the Alexander von Humboldt Foundation or the German Solar Industry Association (BSW-Solar).

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