Fukushima nuclear crisis adds new dimensions to PV growth potential in Germany and Italy

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Government reactions to rapid PV installation growth in key European markets such as Germany and Italy, as well as reactions to installations in once- emerging markets such as the UK and Czech Republic have often been criticised by the PV industry. However, the knee-jerk reaction to the Fukushima nuclear crisis in Japan could potentially be a new and highly welcomed positive influence to the industry, according to market research firm IHS iSuppli.

Although European countries, such as France, that are highly dependent on nuclear energy generation, are unlikely to change their energy policies and move away from nuclear, both Germany and Italy are in a review program that could offset expected declines in feed-in tariffs and lower expected installations compared to 2010.

“Reaction to the Fukushima nuclear crisis has been swift in Germany and Italy,” said Henning Wicht, senior director and principal analyst for photovoltaic systems at IHS. “Germany responded quickly by shutting down seven of its oldest reactors, potentially boosting the prospects for renewable energy in the country. Meanwhile, Italy indicated it might upgrade the role of solar within the country and accept higher volumes of sun-powered energy.”

According to Wicht, should a decision to abandon nuclear energy be reached in Germany, renewable energy will benefit considerably, with PV carried along for the ride.

The market research firm believes that one possible course of action is that Germany could increase the annual PV installation target to 5GW annually, up from 3.5GW now, increasing the long-term outlook for solar.

IHS iSuppli expects PV installations in Germany to follow a similar pattern to that of 2010. However, there has been a four-week delay in renewed installations as prices didn’t fall as fast as installers had expected, to levels that would have enabled sufficient returns on investment to be made.

Installation growth is expected to accelerate in April and then peak in June, followed by a cooling-down period in the third quarter. The fourth quarter is forecast to be strong again, just before new regulations and feed-in tariffs (FIT) are applied in 2012, according to the market research firm.

The result is an installation forecast of 7.2GW in 2011, down only 3.5% from 7.4GW achieved in 2010.

Italy has experienced a significant slowdown in PV installations this year, because of the government's announced plans to prepare new FiT rules by early June. The government has also put a hold on all plans for future nuclear power stations for the next 12 months, while it re-evaluates the role of nuclear energy for the country's future energy needs.

The market research company expects the Italian PV market to develop very positively in 2011, with an expected cap of 1.5 to 2.0GW from 2012 onward, a better scenario than many expected.

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