2012 record year for PV in Germany

In December, Germany installed just over 330 megawatts of PV, bringing the country up to almost exactly 7.6 gigawatts for the year as a whole. In total, the country now has nearly 32.4 gigawatts of PV, equivalent to roughly half of its normal peak demand for power in the summer. But as the figure for December shows, the country is now installing at a slower rate, and ambitious monthly reductions that started in November continue. Germany is likely to fall behind China in absolute numbers this year.

The result was published yesterday on the German Network Agency's website. The figure for 2012 is slightly higher than the 7.5 gigawatts in 2011 and the more than 7.4 GW in 2010, but their proximity is a coincidence – Germany has no ceiling on its annual installations. What it does have is a "corridor" of 2.5-3.5 gigawatts. If installations fall short of or exceed that range, scheduled reductions in feed-in tariffs for new systems are reduced or increased, respectively.

From November 2012 to January 2013, rates dropped by 2.5 percent per month, but the reduction will be lowered to 2.2 percent from February to April. Starting on February 1, the smallest category (roof arrays up to 10 kilowatts), which receives the highest feed-in tariff, drops to an impressive 16.64 cents per kilowatt-hour, with just above 11 cents paid per kilowatt-hour for power from the largest systems still eligible for feed-in tariffs (up to 10 megawatts).

The price of an installed solar array has dropped by two thirds over the past seven years and continues to fall. Germany now has some of the cheapest solar arrays in the world thanks to massive deployment – not research, in which it is also a leader, however.

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Only 10 years ago, a kilowatt-hour from a small roof array costs closer to 50 cents. But had a small number of countries (mainly Germany, but also Spain) not been willing to deploy large amounts of solar at those prices, we would not be where we are today.

Going forward, the relatively modest installation figures (435 megawatts in November and 330 in December) mean that Germany is still likely to exceed its corridor, possibly putting it at 4-5 gigawatts for the year. Discussions about drastic policy changes – as unlikely as they are to be implemented – may, however, make investors reluctant to take unnecessary risks, thereby slowing down installations.

Germany is likely to give up solar leadership this year, possibly for good, in terms of annual installations. This week, Bloomberg reported that the Chinese now have a target of 35 gigawatts by 2015 in comparison to the total installed capacity of only 6.5 gigawatts at the end of 2012 – meaning that the Chinese essentially aim to install roughly 10 gigawatts a year over the next three years. So while Germany is reaching a stage where photovoltaics will increasingly start cutting into the baseload during the summer, countries with much larger grids still have a lot of growth ahead of them.

It remains to be seen whether the United States will be able to take over Germany this year as some market analysts expect, though it certainly should not be difficult for the US to do so. After all, peak summer demand in the US is typically around 700 gigawatts, so Americans would need to have roughly 10 times more PV installed than Germany does to have a similar impact on the grid. (Craig Morris)