Capacity additions for residential, commercial and utility-scale solar all declined in 2014 in Germany, but the ongoing slowdown of German PV deployment has been felt most keenly in the small commercial segment of the market, according to research out today.
Germany-headquartered EUPD Research has published some analysis of the country’s domestic market, after official figures emerged this week to show that the former golden child of European PV only installed 1.89GW of new capacity throughout 2014. This appears to demonstrate an ongoing decline from 2013’s 3.3GW total, which in turn was a sharp drop from 2012, when 7.6GW was installed.
According to EUPD, October 2014 only saw 75MW of new capacity installed, which was described as a “historically weak” month. Meanwhile changes to Germany’s renewable energy laws which went through at the beginning of August did not cause installation figures to drop in July as much as some had anticipated, with 345MW deployed in that month making it the strongest in the year, EUPD said.
Going into specific market segments, commercial solar, defined as systems of between 10kWp to 40kWp output saw less than half as much activity as the previous year, with only 258MW across the segment. Residential installs under 10kWp however declined by only a third, EUPD reported.
Utility-scale solar (over 1MWp) again saw slightly less of a pointed decline, but nonetheless fell by just under 50% from 2013's 1,164MW of systems to 611MW of new systems in 2014. The market going forward is also likely to be limited by a forthcoming tender process. The German government will only hand contracts for 1.2GW of ground mounted solar over the next three years. Over 2015, 2016 and 2017, Germany will auction off 500MW, 400MW and then 300MW respectively. The move has drawn criticism from solar energy advocacy groups, which have argued that the limitations are being imposed even while solar electricity prices and system costs continue to fall.
Accounting for the sharp drop in commercial solar compared to the other segments could be new rules in energy laws (EEG), that apply surcharges on self-consumption of PV power to owners of systems over 10kW, EUPD speculated. The analysts said that under the rules “a more economical operation of the system is made more difficult for the purpose of optimal self-use of electricity”.
EUPD had originally put out a prediction for 2014 of 2.8GW in February, an optimistic prediction which the research team revised downward in May. EUPD claims the revision was in line with the actual 1.9GW figures which have been published by the country’s Federal Network Operator. EUPD Research senior analyst Martin Ammon explained the incorrect first prediction and subsequent revision by referring to a couple of factors which changed over the year.
"Our first forecast was made in February based on installation numbers of 2013 and previous years. We expect a stronger decrease in system prices and we first underestimated the impact of the EEG change. After reviewing the first quarter results the trend for the whole year was clear and we changed our forecast according to this new development," Ammon said.