Fraunhofer ISE study supports a 6% German feed-in tariff cut: higher cuts jeopardizes PV industry

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The Fraunhofer Institute for Solar Energy Systems (ISE) has released a study on the proposed extra 15% feed-in tariff cuts for solar power generation in Germany, which is critical of the changes, which if implemented would jeopardize the entire PV manufacturing industry in the country. A detailed analysis of the impact of the cuts was made, noting that a 6% extra reduction would be achievable without significant disruption to the industry.

“Our calculations show that for solar power plants to 30 kilowatts of peak power a single additional drop of six percent would be appropriate for installations up to 100 kilowatts of ten percent,” reported Prof. Eicke Weber, Director of Fraunhofer ISE. “The proposals of the Environment are far above and would jeopardize the massive solar production industry in Germany.”

Importantly, Prof. Weber noted that the system prices for solar installations had actually declined greater than the manufacturing costs. This was due to the excess capacity in the market at the beginning of the year, coupled to weak demand as the global financial crisis reached its peak.

Claims of dumping modules from Asia-based PV manufacturers were raised at the time and Prof. Weber noted that many of the companies gained market share at that time due to favorable access to capital.

“A reduction of funding in Germany should be based on the real cost of production and thus create the precondition for ensuring that German companies can continue to produce below cost,” noted Weber.

Only through continued and increased R&D efforts would the German PV producers be able to compete with lower-cost producers, Weber warned.

The detailed study is currently only available in German. However, an executive summary in English is being prepared by the ISE and will be posted on its website when ready. The study can be downloaded here.

Vergleich der PV-Anlagenpreise real und fiktiv, kalkuliert aus der Kostenreduktion auf
Basis der Lernerfahrungskurve
(Quelle: Installierte PV-Leistung weltweit: /Prognos 2010/
Tatsächliche PV-Anlagenpreise: 2004, 2005: BSW-Solar,
2006-2009: BSW-Solar-Preisindex auf Basis EuPD-Erhebung,
2010: Annahme 5% Preisreduktion Anfang 2010 ggü. 4. Quartal 2009)
* gesamt installierte Leistung jeweils zum Jahresende
** Anlagenpreise jeweils zum Jahresanfang, fiktiver Preis: 2004 = 5000 Euro

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