CONFIRMED – GERMANY CUTS F-I-T 16-TO-17%

German feed-in tariff cut will be 15-17%
Emma Hughes, 19 January 2009 (PV-Tech)

"…[T]he reports of a 16-17% cut in feed-in tariff rate for Germany were true, and the cuts are to go ahead from April 1, 2010…[T]hese huge cuts are in response to over-generous funding over recent years…[T]he country's Federal Environment Minister Norbert Röttgen [said the corrections are in response to market developments]…

"…[The new German] government [intends] a fundamental correction of the EEG mechanism [and the feed-in tariff (F-i-T in it]. At present the law encourages the production of electricity from wind, solar, hydro, biomass and geothermal energy, and guarantees the plant operators 20 years of fixed payments for their electricity. These are occasionally substantially above the market price."

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"For PV systems that went into operation in 2009 the cost, dependent on the type of system ranges from €0.32 to €0.43/kWh of electricity. This makes producing solar panels by far the most expensive green energy. By comparison, conventionally produced electricity… [is around] €0.05 to purchase. The difference between market price and the feed-in tariff is passed on to consumers. In 2008 alone the total eco-compensation was approximately €8.95 billion.

"PV systems are also very attractive as investment properties…[because] the prices of [solar systems] have fallen significantly…[and] the electricity generated will continue to be paid at the [elevated] statutory level. The EEG [digression rate]…is too low, even from the perspective of the system manufacturer."

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"With the combination of lower asset prices and high FiT rates the demand for PV systems [will explode and the government fears it will create a bubble without a steeper cut]…[On January 20] the following official changes were proposed for the EEG…[They are expected to be approved by the German Parliament by the end of March 2010. Efforts by the German New Energy industries to resist are not expected to produce significant changes]…

"…[1} Rooftop: From April 1. -15%…[2] Free field: From July 1. -15%…[3] Free field "pure farm" and "Valuable" land": -25%…[4] "Direct use of pv electricity": plus €0.05/kWh (this change is yet to be clarified, until now it was a bonus for systems <30KWp-)…[5] Future regulation for PV in the EEG: Mechanisms are to stay the same, a reduction will occur from 1.1.2011 according to EEG 2009 regulation. Market target is now 3GW/a, if >3,5 GWp/a is reached a further -2.5%, at 4,5GWp another 2.5% will be cut…"