Beginning on March 9, a new subsidy policy will take effect in Germany. Key changes include progressive adjustment of subsidies, exclusion of ground-mounted solar systems over 10 megawatts from receiving support, and a partial buyback policy to take effect on January 1, 2013. EnergyTrend, TrendForce's green energy research division, believes that this policy change will have a far-reaching impact on the German solar industry.
Taking a closer look at the subsidy cuts, the March 9 adjustment will represent a 20-30% decrease compared to January 1, 2012 levels. Mid to large-scale (10 kilowatts to 10 megawatts) rooftop systems will be hit with the deepest cuts, while ground-mounted solar parks under 10 megawatts will see a 25% reduction. Additionally, on May 1, 2012 subsidies will be decreased by €0.15￠/per kilowatt-hour every month until January 1, 2013.
Furthermore, not only does this round of cuts exclude large ground-mounted solar systems (over 10 megawatts), but the new FiT policy to take effect on January 1, 2013 will limit the amount of energy that can be subsidized. This will have a profound impact on the German market. First, the exclusion of large ground plants will likely push the country’s market towards rooftop systems. Second, beginning on January 1, 2013, systems under 10 kilowatts will only receive subsidies for 85% of produced electricity. Larger facilities will have a 90% subsidy cap. EnergyTrend believes Germany’s new policy has properties of both FiT and NET mechanisms, allowing subsidy adjustments based on market status, which will benefit the development of its solar market.
EnergyTrend indicates that this adjustment will be beneficial to the German market, for several reasons. The change will help stabilize the market, helping to prevent situations such as the December installation explosion seen in past years. Furthermore, the new policy will steer the market towards rooftop installations. Combined with other policies, this could benefit the development of micro-inverters and other new products as well as technology migration. Lastly, the dual FiT and NET characteristics of the new subsidy policy will help reduce the government’s financial burden.