Local content rule among emergency measures to boost French solar industry

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The French Ministry for Sustainable Development and Energy has released further details of emergency measures to boost the country's solar industry, which include new rules for solar project bidding and a 10% local content allowance.

The measures are intended to offset the French solar industry's trade deficit, which has grown to €1.35 billion.

The government has already refined the current incentive scheme in order to meet its target of 1GW, but under the new details the French government has proposed changes to the tender process.

Minister Delphine Batho has sent the conditions of the next tender to the French energy regulator CRE, which has set a target of 400MW for medium-sized systems between 100-250kW. Within this size bracket, 200MW will be allocated to CSP and PV with trackers and 200MW for installations on shaded structures and buildings.

The government believes this will encourage applications from small and medium sized enterprises. 

For larger installations, over 250kW, candidates will be selected on the basis of cost, environmental impact, construction time and a project's contribution to research and development.

The changes to the tender process will be launched early this year, although a date is yet to be confirmed.

The frequency of bidding will be cut from four times a year to three times a year because the current government found the results of those tenders unsatisfactory in terms of industrial benefits as well as the cost to the consumer.

The schedule is as follows:

January 2013: Referral to the CRE with a draft specification
February / March 2013: Publication of the specification in the Official Journal of the European Union
August / September 2013: Deadline for submission of tenders for the first round
November 2013: Announcement of the winners of the first round
May 2015: Commissioning of the winning projects from the first round

The second change includes the introduction of a domestic content allowance of up to 10%, due to the amount of CO2 produced when modules are imported compared to when modules are manufactured in Europe.

For PV system consisting of crystalline modules the purchase price will be increased by 5% if all stages of processing silicon wafers to PV cells are carried out in Europe. This includes welding, assembly and lamination of the cells. This should also incorporate testing of the modules on European soil.

The allowance will be increased to 10% if both of these conditions are met as well if the silicon ingot processing stage is carried out in Europe.

For thin film, the purchase price will be increased by 10% if all the steps of surface preparation are met.

However, this only applies to new projects commissioned after the publication of these new measures in the Official Journal of the European Union, OJEU.

For building-integrated PV installations to qualify for the bonus, it must either replace elements of the roof and/or be located parallel to the plane of the roof and not exceed 2 centimetres.

With regards to the feed-in tariff, which will see a 20% cut, the CRE will determine the volume of PV projects allocated for commissioning and adjust rates accordingly. The government said the adjustment would reflect the decline in module prices.

The government is justifying its domestic content allowance in the face of complaints from Chinese manufacturers accusing Europe of over-subsidising its solar industries, by saying that this offsets the cost to the electricity consumer.

In order to placate consumers, the government maintains that these new measures will generate investments of more than €2 billion and will create or sustain about 10,000 jobs.

Furthermore, the additional public goods charge collected from consumers to pay for electricity has been estimated by the government to be between €90-170 million per year. This works out to approximately €1-2 per year per household.

Delphine Batho has said she wants every euro invested in energy to bring in investment and create jobs in France.

Senior National Policy Advisor from EPIA Marie Latour said: “In general terms we welcome the emergency measures adopted in France, where clearly there can be a much bigger market for PV. This commitment from the French government is a good sign that it recognises PV as an increasingly mainstream technology and thus an important part of Europe’s power system.”

However, French solar energy association Enerplan expressed some doubt in the government’s plans. “Without doubt it will be difficult to install 1GW of PV in France in 2013. part of this target of 1GW will need to be postponed to 2014 in order to complete these projects because of the tender procedure,” said Sylvain Roland, Head of Mission.

“1000MW of PV per year is the minimum demanded by the French PV industry which can be structured in a sustainable way.

“The government has demonstrated a willingness to develop the national PV industry,” concluded Roland.

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