Germany – An Expensive Paradise for Solar?

Handelsblatt is today running two critical articles on the high cost of solar photovoltaic generation, quoting figures from a recent McKinsey study, RWI (Rheinisch-Westfälisches Institut für Wirtschaftsforschung), and the Federal Association of Consumer Organisations (Bundesverband der Vebraucherzentralen). The paper quotes a McKinsey study that the cost of moving to 80% renewable energy generation in 2050 will amount to EUR 6.6 billion between 2020 and 2050, assuming the European Member States coordinate their efforts. The continuation of uncoordinated efforts would cost 30 to 35% more.

There are some doubts as to whether it really makes sense to have a big installed solar generation base in Germany, with only 983 kWh/kWp in Munich, compared to 1,400 in the Spanish La Mancha region or 1,440 in the French Provence.

The traditionally critical RWI estimates that for German photovoltaic plants installed until the end of 2011, operators will collect EUR 120 billion due to 20 year feed-in tariffs.

Mr Krawinkel of the also critical Federal Association of Consumer Organisations is quoted as expecting an increase in the reallocation fee pursuant to the Renewable Energy Sources Act (EEG) from currently 2.05 to 3.5 ct/kWh. Average EEG reallocation fees per customer would increase from currently EUR 85 to EUR 145 next year. 50% of this would be due to solar power, even though solar would only contribute 3.5% to electricity generation.

Some experts are expecting between 6 and 8 GW of new PV capacity in Germany this year. Official figures for additional PVcapacity in the first six months of 2010 have not yet been released. In July, the Federal Network Agency expected German additional installed photovoltaic capacity to exceed 3 GW. The additional capacity for the remainder of 2010 is particularly difficult to predict due to the recent July and the upcoming October reduction in solar feed-in tariffs.

The Federal Government will be reviewing the EEG support regime for renewable energies as part of its new German Energy Concept.

Sources: Handelsblatt, 16 September 2010, pages 1, 6 and 7, Bundesnetzagentur

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