German solar juggernaut rolls on despite tariff cuts [View all]

[kristopher]

German solar juggernaut rolls on despite tariff cuts
By James Holloway

...Germany's solar expansion continues apace. To achieve its aim of 52GW of installed PV capacity by 2020 it only needs to install 3GW per year—about half the rate at which it's currently trundling along. Clearly German solar expansion is looking beyond domestic suppliers to provide cheap, efficient equipment—in many cases to China and the US, where manufacturers have more nimbly adapted to efficiency-boosting and price-cutting advances.

It's likely that feed-in tariffs will be abolished outright long before 2020, and the consensus in the German solar industry appears to be that this will make very little difference to progress. As photovoltaic power fast approaches grid parity—i.e. a cost level with that of purchasing from the grid—the idea of financial incentives for solar installations appears increasingly redundant. If the cutting of feed-in tariffs is a strategy to undermine the march of photovoltaic solar power (as has been theorized), it doesn't seem to be working. Rather, the effect seems to be that, by making installers more cost-conscious, the least competitive manufacturers are weeded out. If the upshot of reducing feed-in tariffs is to keep the solar industry honest, how bad is that, really?

The article also has a good discussion of these charts that are used to illustrate the way solar impacts electricity pricing:






They add a couple of points that are worth noting. They quote a study saying the 25GW of solar in Germany is producing a 40% reduction in daytime pricing but only a 10% overall reduction in electricity costs. It is also resulting in an increase in nighttime electricity costs as fossil producers are forced to raise their prices to make up for lost daytime revenue. Obviously that is not enhancing the competitive position of fossil fuels in relation to new technologies.

As one writer put it, "solar PV is not just licking the cream off the profits of the fossil fuel generators—it is in fact eating their entire cake."

http://arstechnica.com/science/news/2012/04/german-solar-juggernaut-continues-despite-tariff-cuts.ars