Federal Cabinet Approves Solar Feed-in Tariff Cuts

The Federal Cabinet (German government – Bundesregierung) approved a reduction of solar feed-in tariff cuts, apparently based on the agreement between Mr. Röttgen and Mr. Rösler. The reduced tariffs shall reflect the decreasing market price for solar modules and shall stabilize the EEG surcharge.

A draft bill is not yet officially available, but it looks as if the decision may be substantially identical with the agreement on solar feed-in tariffs reached last week between Minister Philipp Rösler (Federal Ministry of Economics and Technology – BMWi) and Minister Norbert Röttgen (Federal Ministry for the Environment, Nature Conservation and Nuclear Safety – BMU).

According to the press release, a one-time cut of over 20% shall become effective as of 9 March 2012. Furthermore, feed-in tariffs shall be reduced monthly by 0,15 ct/kWh starting 1 May 2012. In addition, plant operators shall only receive feed-in payments for a limited amount of electricity generated, the press release says.

According to the proposal by Ministers Rösler and Röttgen, small roof-top installations up to 10 kW shall receive feed-in tariff payments for 85% of the energy generated in one calendar year, while all other installations shall receive payments for 90% of the energy, starting 1 January 2013 for all plants commissioned after 9 March 2012. This shall create an incentive for self-consumption of the energy exceeding the limit or for direct marketing. A table with details of  the proposal of 23 February can be found here.

The government’s communication also mentions that the expansion of new solar power plants shall be limited, without going into detail further. The ministers had suggested last week that BMU shall be given the competence to issue ordinances in cooperation with BMWi so that the ministries can faster adjust monthly reductions and tariffs in case the solar expansion deviates from the target corridor of 2,500 to 3,500 MW annually. The target corridor itself shall decrease by 400 MW annually starting in 2014 and shall range from 900 to 1,900 MW in 2017.

The energy information provider energate quotes BMWi state secretary Stefan Kapferer as saying the ministry expected the German Bundestag (Parliament) to possibly make changes with respect to the 9 March 2012 cutoff date and the right to issue ordinances, but was optimistic to have wide support among the ruling CDU/CSU and FDP coalition parties for an amendment of the Renewable Energy Sources Act (EEG) that regulates feed-in tariffs.

Procedurally, the amendment of the EEG has to somehow be brought before the Bundestag and the Bundesrat for their vote.  The intended timing may make it is impossible to follow standard parliamentary procedures to get the amendment through the Federal Parliament and the Federal Council. Therefore, the government may have to fast track the amendments, possibly by adding the amendment to some other legislative project already further advanced in the parliamentary process. While this has been done for previous amendments of the EEG, such approach would not exactly add to the transparency of the lawmaking process or enhance the likelihood of the amendments having undergone close parliamentary and public scrutiny.

Source: Bundesregierung

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