German Solar Demand on Record Pace in 2010; Feed-in Tariffs Updated

Monday, Sep 06, 2010

Photovoltaic system installations in the first half of 2010, estimated at 3 GWp, continue to consolidate Germany's position as the world's largest photovoltaic (PV) market and an attractive investment location for PV companies. In 2009, Germany accounted for approximately one of every two newly installed modules worldwide, with total installations at 3.8 GWp for the year. Germany Trade & Invest will have representatives at this year's European Photovoltaic Solar Energy Conference & Exhibition in Valencia, Spain, from September 6-9 to introduce opportunities for PV companies in Germany.

Amendments to the photovoltaic feed-in tariffs of Germany's Renewable Energies Act (EEG) were passed in early July, with a further adjustment to take effect October 1. The changes mark a further shift towards the rooftop segment by abandoning field installations on cropland and increasing the attractiveness of the own consumption bonus for small and medium-scale rooftop installations. This bonus is paid to rooftop installation owners of systems smaller than 500 kWp who intend to use the energy they generate.

Feed-in tariff rates were reduced by 13 percent for rooftop installations and eliminated for cropland field installations from July 1. At the same time, conversion areas saw a reduction of 8 percent and all other areas were decreased by 12 percent. Beginning October 1, these rates will be reduced by a further 3 percent. Still, the new tariffs remain highly attractive, with rates ranging from 25.02 - 34.05 EURc/kWh for installations connected before October 1 and 24.26 - 33.03 EURc/kWh for those connected during the remainder of the year.

The law, established ten years ago, requires power companies to buy renewable energy from system owners at the corresponding feed-in tariff rate for 20 years, guaranteeing an attractive payback time and high returns.

Increased Demand by Private Users

The two-tiered changes to the EEG are a reaction to the increased price competitiveness of photovoltaic systems, including the recent price drop for solar panels and components. These developments have created a number of new market opportunities for PV companies. Increased demand in the rooftop segment corresponds with installations by private users who overwhelmingly prefer high-quality systems. Changes are also leading to growing demand for energy storage systems and smart grid applications to fully profit from the own consumption bonus. By 2013 energy from PV sources is expected to be competitive with conventional energy sources in the electricity market for private consumers.

Source: PR Newswire