Germany specifies 2012 PV reductions
Germany's Network Agency has announced that solar feed-in tariffs will be reduced by 15 percent for systems installed after January 1, 2011, putting photovoltaics at the level of retail power in the cloudy Germany far sooner than anyone would have dreamed of when the policy was implemented only seven years ago.
There is perhaps no better proof of the effectiveness of feed-in tariffs in bringing down the cost of renewable energy than the success of photovoltaics in Germany. Even under the relatively modest conditions in the northern European country, solar power will be profitable in 2012 even under the once again drastically reduced feed-in rates that take effect on January 1, 2012. Depending on system size and type (ground-mounted or building-integrated), feed-in tariffs will drop to between 17.94 and 24.43 cents per kilowatt-hour.
Germany reduces its feed-in tariffs every year on January 1, but it now has a flexible mechanism to determine the extent of the reductions based on installed capacity over the previous year; the more that is installed, the greater rates are reduced. The Network Agency announced today that an estimated 5,200 megawatts was newly installed over the past year, far less than the 7,800 megawatts in the previous year, but nonetheless enough to trigger a reduction of 15 percent. The highest possible reduction would have come with 5,500 megawatts of newly installed capacity, producing an 18 percent reduction.
The solar sector has reacted calmly to the announcement of the further considerable reduction. In 2004, more than 50 cents was paid per kilowatt-hour for some types of solar arrays, so rates have been slashed by far more than 50 percent in just under eight years – and still, investments in solar arrays remain profitable. The German Solar Industry Association (BSW) says it is confident that further investments in solar power production will remain a good investment in 2012 even under the new rates because the price for turnkey solar power systems continues to drop. Indeed, solar power is well on its way to passing up offshore wind in terms of price and may even catch up with onshore wind in a not-so-distant future. (Niels Hendrik Petersen / Craig Morris)
