Greece joins the subsidies set

An official announcement that will influence Greece’s future potential in the PV industry was released by the Hellenic Association of Photovoltaic Companies (HELAPCO), which outlines a new incentives program for small rooftop applications up to 10kWp. It is hoped that this is the first of several such announcements by HELAPCO, with this small-scale incentive acting to spur on solar energy demand in the country.

The new program, which applies to both residential and commercial applications, sets feed-in tariffs at 0.55€/kWh for installations up to 10kWp. Eligibility for the tariff requires that a residence source part of its hot water needs from another renewable source. The program guarantees the tariff for 25 years, and the payment will be subject to inflationary adjustments at 25% of the previous year’s CPI.

With the country currently logging around 30MW in shipments for 2008, Barclays Capital Solar Energy analyst Vishal Shah expects Greece to ship approximately 45MW in 2009. Shah expects the outcome of this subsidy news to have a positive effect on financing and administrative conditions:

“Checks suggest that licensing for 10kW systems could took take one week versus over one year for large systems of ~100KW. Our calculations suggest that 25 year roof-top incentive at $2/W module price could yield over 35% unlevered IRRs given attractive solar conditions in Greece. Chinese solar PV companies that sell to European distributors and companies such as IBC Solar, BP Solar, Krannich Solar, Phoenix Solar (covered by Rupesh Madlani) are likely to be primary beneficiaries of this new incentive development.”

A 5% regression for newcomers has been included in the program as of 2012, and residential installations do not have to be registered as a business to avail of the tariff. The program is expected to come into effect from July 1st, and is hoped to be the first step in the country’s introduction of further incentives to increase the company’s solar installation capacity.