New Monthly or Quarterly Solar Feed-in Tariff Cuts?

Initial information after a meeting of Federal Environment Minister Norbert Röttgen with representatives of the solar industry suggests that the 2011 solar boom might lead to monthly or at least quarterly solar feed-in tariff cuts but not result in a higher reduction than the maximum reduction of 24%.

The 2011 capacity addition of another 7,500 MW despite regular annual tariff cuts plus extra cuts in the past, triggered speculation and suggestions for new cuts – despite the fact that the amended Renewable Energy Sources Act (EEG 2012) has only come into force on 1 January 2012. While Liberal (FDP) Economics Minister Philipp Rösler and some conservative politicians of the ruling CDU/CSU and FDP coalition spoke out in favour of a 1,000 MW annual cap on solar funding and/or proposed an overhaul of the EEG promotion scheme, Minister Röttgen had expressed his intention to maintain the EEG solar support system, albeit with further reductions.

It appears as if rates may not be further reduced than the current maximum of 24%. Depending on capacity additions the annual standard 9% reduction can increase by up to 15% pursuant to Section 20a para. 3 EEG. Section 20a para. 5 provides for an additional capacity based mid-year reduction of up to a further 15%. 

Of course, any changes to the degression regime would require an amendment of the EEG, which would have to be approved by parliament.

Shorter intervals between (possible) reductions of the solar tariffs are seen as a way to avoid large capacity increases before the annual and mid-year reductions. Last year’s huge December expansion of 3,000 MW has been attributed to advance purchases of solar installations in view of the 2012 reduction. also reports that Carsten Körnig, managing director of BSW Solar, also spoke out in favour of solar feed-in tariffs that vary depending on the region and its specific sunshine hours. A similar proposal was made by the president of the Federal Network Agency  in the past. For wind power the EEG already stipulates that the tariffs guaranteed for the first five years after commissioning vary to a certain degree depending on the wind yield (Section 29 para. 2 EEG).

Source: BSW Solar;

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