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Market research firm EuPD Research has warned against using fluctuating solar pricing to calculate the proposed German feed-in tariff cuts. Markus Hoehner, CEO of the market research and consulting institute, claims that cuts should be calculated on the basis of long-term trends and forecasts. He also notes that rising electricity prices were not attributable to the increase in the adoption of solar in Germany, rather the rises are due to electricity production costs rising, higher transport costs and higher tax burdens. According to EuPD Research, the additional cost for the promotion of solar electricity accounted for only €0.24 cents per head per month in 2009.

“It is not advisable to calculate political incentives solely on the basis of a short-term price decline, but on the basis of long-term trends and forecasts. Actual system prices, which serve as a foundation for calculations by the federal government, reflect a distorted image,” noted Hoehner.

According to EuPD’s own research published in the ‘Photovoltaic Price Index,’ the prices reflect a much more realistic price level than similar methods used to evaluate purchasing prices. The price margin of solar systems is said to be ‘enormous,’ and the severe price reductions in the last quarter are not revealing for the long term.

Hoehner, noted that it is unclear as to what extent the amended incentives will impact the German solar market and the German-based industry, buts expects strong cuts on all steps of the solar value chain in Germany.