German PV subsidy cuts: yes no…oh yes!

The new German Government didn’t spend much time after the recent election to propose changes in the FiT program above and beyond the planned yearly declines. Then under pressure from the PV industry and certain states, politicians became more conciliatory to less than ‘aggressive’ changes, even though it was never made clear what the degree of changes would inevitably be.

However, with the increasing belief of a growing number of industry observers and players, PV installations in the country are set for record levels, far beyond what the new Government would accept under ‘reasonable’ growth.

The catch is that while projections for installations this year have helped ease the pain of an industry struggling under the global economic recession, it looks increasingly likely that there will be more aggressive changes made to the FiT to counter the huge growth.

The industry will find that its arguments for a ‘reasonable’ approach to changes could fall on deaf-ears.

I was actually hoping that the MW installations didn’t reach the levels some are suggesting as this would help the industry argue effectively that a good FiT system is good for all. That would now seem to be under serious threat as Bloomberg reports that Germany’s Environment Minister, Norbert Roettgen was quoted as saying that there was now the situation of ‘overburdening’ and that a new mechanism would have to be flexible ‘to market conditions.’

I take that political speak to mean deeper cuts to the FiT than was expected after the pressure from the industry had sunk in. Whether we are back to the levels of cuts muted by the Government upon election or perhaps even worse, are impossible to tell at this moment.

One way to gauge the severity level is if proposals with more clearly stated aims are issued early next year so that they could even be implemented mid-year. If we get a more pragmatic approach adopted then implementation would occur for 2011 as per normal changes.