Renewable Energy Act Amendments Shift Demand
Berlin, Germany (SPX) Jul 13, 2010
Amendments to the photovoltaic feed-in tariffs of Germany's Renewable Energies Act (EEG) have been passed, marking a shift towards the rooftop segment.
Germany's Bundesrat (lower house of parliament) approved the amendments this morning, clearing the way for them to become law. The changes abandon field installations on cropland and increase the attractiveness of the own consumption bonus for small and medium-scale rooftop installations.
Implemented retroactively to take effect July 1, feed-in tariff rates will be reduced by 13 percent for rooftop installations and eliminated for cropland field installations. At the same time, conversion areas will see a reduction of 8 percent and all other areas will be decreased by 12 percent.
Beginning October 1, these rates will again be reduced by a further 3 percent. Still, the new tariffs remain highly attractive, with rates anticipated to range from 25.02 - 34.05 EURc/kWh for installations connected between July 1 and October 1 and 24.26 - 33.03 EURc/kWh for those connected during the remainder of the year.
The new amendments also more than double the federal target of annual installed capacity to 2.5 - 3.5 GWp.
The law, which was 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.
Even greater income can be secured by utilizing the "own consumption bonus," which is paid to rooftop installation owners of systems smaller than 500 kWp who intend to use the energy they generate.
For 2009, photovoltaic installations amounted to 3.8 GWp, making Germany again the world's largest PV market and an attractive investment location for PV companies. Germany accounted for approximately one of every two newly installed modules worldwide. For 2010, some experts predict the market could double its 2009 mark.
Increased Demand by Private Users
The shift in focus that favors the rooftop segment is expected to further increase demand for 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.
Decreasing system prices and rising electricity prices have enabled the German market to approach grid parity sooner than expected. By 2013 energy from renewable sources is expected to be competitive with conventional energy sources in the private user electricity market.
Quality Segment Boosts Attractiveness of Local Production
Germany's PV industry also benefits from the highest density of R and D institutes in the industry. At the same time, the country boasts a well established industrial infrastructure, large equipment supplier base, and qualified and experienced workforce.
An indicator of confidence in Germany's photovoltaic cluster strength, international companies First Solar and Avancis as well as German PV companies SolarWorld and Juwi have announced major expansions in Germany in recent weeks. All of these new investments are for sites in Eastern Germany, a major manufacturing hub for Germany's globally renowned photovoltaic industry.
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