Solar Feed-in Tariffs Under Review

He wanted to maintain the feed-in tariff promotion scheme under the Renewable Energy Sources Act (EEG), but discuss further cuts of solar feed-in tariffs with industry, Federal Minister of the Environment Norbert Röttgen (CDU) said at an annual energy industry conference in Berlin. His comments came as a reaction to calls by his colleague Economics Minister Philipp Rösler for a system change due to surging costs following the strong expansion in particular of PV installations in Germany in 2011.

2011 saw another solar boom in Germany, adding 7,500 MW after 7,400 MW in 2010. According to preliminary figures, December alone saw 3,000 of new capacity. If the 2011 figure is confirmed, new PV capacity it will be more than twice as high as the government’s annual 2.5 to 3.5 GWp PV target corridor, which the government tried to secure by implementing two tariff reductions in July and October 2010 (in addition to the yearly degression of the tariffs). PV feed-in tariffs were again reduced by 15% at the beginning of 2012. The addition of new capacity in late 2011 will also trigger another mid-year reduction of at least 12%, as new capacity at the beginning of 2012 also influences the reduction rate. Without changing the law, a 15% reduction in July is likely.

In view of the costs for solar promotion Economics Minister Rösler had first demanded a cap on solar tariffs at 1,000 MW and had recently come up with the idea of a minimum quantity for renewable energy, which utilities have to supply, giving them the choice of the energy form. This quantity-based system was initially proposed by the Monopolies Commission in its latest report on competition in the electricity and gas markets and is also backed by the President of the Federal Cartel Office Andreas Mundt.

Solar feed-in tariffs amount to up to 28,74 ct/kWh for electricity generated from solar radiation in, attached to or on top of buildings if the installed capacity does not exceed 30 KW. At the energy exchange 1 kW trades at roughly 5 to 6 ct. The difference between the guaranteed feed-in tariffs paid pursuant to the EEG and the sale of the renewable energy at the EEX energy exchange by the the transmission system operators (TSOs), is paid for by consumers, who have to pay the so-called EEG surcharge (EEG-Umlage, also called EEG reallocation charge). The surcharge has steadily risen, in particular in 2011, mainly due to the solar boom.

Even if the EEG promotion scheme is upheld, the 2011 solar boom is likely to further tariff reductions to avoid overburdening and endangering the whole promotion system. Currently more than half of the EEG reallocation charge can be attributed to solar costs, while solar energy only covers 3% of the electricity demand, Minister Rösler pointed out. It is yet unclear when and how tariffs are reduced. There are speculations about either a quarterly adjustment or higher reduction percentages, Berliner Zeitung writes.

Source: Handelsblatt

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