Two major markets for solar power are about to face interesting times. France and Germany will be cutting the rates paid to solar power system owners for generating electricity under their respective feed in tariff programs.
While a cut to Germany’s solar feed in tariff has been on the cards for some time and has been steadily reducing per schedule, a further cut of 16-17% of the current rate of up to AUD 66 cents per kilowatt hour (current exchange rates) will occur from April 1, 2010 for new systems commissioned from that point.
The previously rumoured cuts recently put solar power equipment manufacturers into overdrive, trying to keep up with demand for solar panels and inverters in Germany. The rush in Germany has contributed in part to Suntech’s solar panel production being spoken for until the middle of this year. While the lead up to the cuts has seen a boom for some companies, what will happen after they are implemented has set the industry on edge as many manufacturers of solar power components have come to heavily rely on the German market.
France is also set to substantially reduce feed in tariffs, slashing the rate by 24% from AUD 0.85 to AUD 0.65 per kilowatt hour (current exchange rates). France’s government intervened due to fears of a speculative bubble and a major influx of applications for the program reaching thousands of submissions a day.
The French government believes the action taken will prevent a repeat of the scenario in Spain where a feed in tariff program was so popular , it created a boom followed by a bust that resulted in thousands of jobs lost in the Spanish solar industry once the government tried to reign the program in with drastic measures.
