Early warning signals were emitted from Germany yesterday that suggested that under-pressure Chancellor Angela Merkel could be losing the plot. It could, however, be just the start of another campaign to pre-warn the German public that the January 2012 feed-in tariff cuts could be deeper than many anticipate.

An article by Reuters cited Merkel as having suggested at a Christian Democrat party rally that solar power in Germany wasn’t becoming commercially viable in comparison with wind, and that it made more sense to get solar energy from Greece!

Chancellor Merkel went even further, noting that with respect to solar power, it was ‘not rational for so many subsidies to go towards a sector which ultimately produced little energy.’

Not having the time to address these warped perceptions in a detailed thesis, it should be noted that as a result of over 17GW of PV being installed in Germany, electricity wholesale prices have plummeted in summer months, despite it not being the sunniest of summers.

It should also be noted that transmission losses from Greece to Germany would need to be calculated and thoroughly analyzed before such remarks make any sense. Of course, there are other options available, despite the massive investment required to tap North Africa as a source of solar electricity on a much bigger scale.

Of course, Greece has but a small installed base, and I’m doubtful as to whether or not that country’s power generation would beat those massive solar projects planned in the deserts of North Africa - both seem to be on the very distant horizon.

If the beleaguered leader isn’t, in fact, going mad, then I can only assume that the politicians have begun to condition the German people’s expectations in order to pave the way for greater cuts to a revised tariff.

Cuts are currently projected to be in the region of 15% for January. However, with module prices in freefall, Merkel may already know that further cuts could be absorbed but prices not reflected under the current sliding-scale system.

So it would seen that Merkel isn’t going mad, and is simply back to manipulating the FiT.

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