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The Solar Energy Subsidies in Germany will Likely Decline By 13% in January 2011

published: 2010-10-19 13:41

German Environment Minister Dr. Norbert Röttgen indicates, in light of the current expansion rate in German solar market, the solar energy subsidies are expected to fall by 13% in January next year. TrendForce indicates that the concern about excess supply in 2011 might be increasing.

According to the latest survey from TrendForce, by January 2011, the solar energy feed-in tariff reduction is estimated to reach 13% in the German market, and the figure will increase by 4% reduction, compared with the forecasted figure of 9% at the beginning of 2010. The adjusted subsidy amount will likely range from €22.07cent/per kWh to €28.74cent/per kWh, and the YoY will fall to -26.6% compared with that in January 2010.

On the other hand, due to the demand slowdown in the German market, the latest quoted price for solar cells has dropped by 6-7%. In addition, based on the anti-ENSO event and the coming cold weather in Europe, TrendForce indicates that the urgent orders will be unlikely to appear in the European market in December, and the market demand in 1H2011 will go down.

In terms of the supply and demand status of the solar market in 2011, the TrendForce’s statistics suggests that the global capacity is expected to range from 20GW to 25GW, with the demand from 15.5GW to 18GW, leading to the supply and demand gap around 5GW.

TrendForce indicates the price fluctuation of solar cells is only limited to the business between solar cell manufacturers and module producers. However, the quoted price for wafers will remain flat, which is not affected by the price fall of downstream customers. If the pressure from the decreasing solar cell price continues to increase, the solar cell manufacturers are forced to reduce the prices of wafers and Poly-Si to reflect costs.

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