Angela Merkel’s coalition government lock horns on German feed-in tariffs

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German environment minister Norbert Röttgen continues his adamant refusal to cap new PV installations. However, perhaps in order to reach some semblance of a compromise and placate his Free Democrat coalition partners, he has suggested bringing forward reductions in the country’s FiTs by three months to April 1.

Röttgen has said he does not wish to concede to the demands of Economy Minister Philipp Roesler, leader of the FDP, to cap new installations at 1GW per year, but instead seeks to leave PV installations capped at between 2.5GW and 3.5GW per year.

Röttgen said that there was not yet any concrete plan for the level of cuts he aims for on April 1. It was also still unclear if future reductions would be made each month in smaller steps or on a semi-annual basis as they have been in recent years. Röttgen and Roesler are to meet next week in order to reach a beneficial conclusion and put an end to the speculation and uncertainty surrounding the industry.

“My goal is to change the law effective April 1,” Röttgen told journalists after a meeting with Christian Democrat members of parliament to discuss speeding up cuts in the FiT. “It's important that we act quickly. A concrete cap would choke off the industry”.

Hans-Josef Fell, member of the opposition Green party, said that it would be difficult to see changes passed by April 1. He added that the plans could also upset investors. “It's unrealistic to believe that a new draft law can be ready at the end of February and that the law will take effect on April 1. It's all just an early April Fools' joke.”

But Röttgen has warned against the impulsive implementation of cuts, but rather that changes should be thoroughly scrutinized and backed by the upper house of parliament with the support of opposition parties to pass the measures quickly, which could be interpreted as distributing responsibility should his recommendations backfire on the industry.

Joachim Pfeiffer, a senior CDU member, told reporters that his party’s deputies were in broad agreement with Roesler's proposal for alternative cuts from a little more than 10% to as much as 40%. The FiT has been falling by between 15% and 30% in recent years, depending upon solar capacity added in the previous year.

The environment minister has said he is canvassing for cuts to solar farm installations that already receive lower incentives due to problems they cause to the grid. About a third of last year's installations were on fields and not on rooftops.

Germany gets about 20% of its electricity from renewable sources, of which 4% is from solar power. Germany has a total of about 25GW of installed PV capacity – about half of the world's total.

Currently, producers of PV electricity are guaranteed fixed rates for 20 years from the point of installation. The FiT this year is €0.2443kW/h, down from €0.49 for systems installed in 2007. Electricity in Germany costs about €0.23kWh, meaning grid parity has almost been achieved faster than was expected. Customers foot the bill, paying approximately €0.02kWh in addition to their electricity bills.
 

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