Surge in Demand for German Solar Energy Investments as Feed-in Tariff Reduction Approaches
The solar energy world leader (as seen on the BBC), Germany, is currently seeing a spike in demand for Solar Energy Investment as the timeframe that you have to ‘plug in’ before the cut in the feed-in tariff (FIT) looms.
Reuters reported (citing a parliamentary source), a cut of up to 16% is anticipated for the majority of solar photovoltaic installations from 1st July 2010, significantly reducing the incentive for investors.
Solar photovoltaic (PV) panel makers have been inundated with orders from both homeowners & businesses alike with larger roofspaces and solar panel installers have been working around the clock to fit the panels in time before the reduced tariff is activated.
Experience International MD ‘Steven Worboys’ who are marketing exclusively, for the first time in the UK, Solar Panel investment in Germany, stated,
“With the first of July timeframe fast approaching we are sourcing extra roofspace in order to meet the serious demand for solar energy investments in Germany. UK investors know that ‘plugging in’ by this date will maximise their returns over the next 20 years.”
The FIT which was 1st introduced into Germany in 1990 and requires utilities to connect renewable energy generators to the grid and purchase the electricity produced at a rate of 65-90% of the average tariff charged per unit to consumers.
The model has been so successful in supporting the evolvement of the renewable energy industry that is has been replicated all over the world, including the UK.
However, some 20 yrs later, the government in Germany has decided that the feed-in tariff, currently at 32 – 43 eurocents/kWh, is over-subsidizing the renewable energy industry and costing the consumer too much (8.95 Billion Euros in 2008) and so the FIT rate is to be reduced. The decrease of up to a third in the cost of production of solar panels and growth in cheaper imports, especially from China, also influenced the decision.
By their very design FITs are intended to reduce over time and the cut is not unexpected, even if the double-digit nature is deemed quite severe by some.
But as Steven Worboys concludes:
“The feed-in tariff has played a major part in evolving Germany into the biggest and most successful solar energy producer in the world. It has installed 9 GW of PV capacity with a target by the government of 66 GW by 2030. The industry has a turnover of some €1.7 billion per annum, employs 20,000 people and analysts anticipate that solar energy can supply 25% of the nation’s electricity by the year 2050.”
With this clear progress to date and new government targets for renewable energy production being introduced, the imminent cut in FITs is certainly not the end of Germany’s solar success story and the growth and success of Solar power as a leading Alternative Energy Investment.
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