Germany Decides on Solar FiT Cuts, China Ready to Step In

The long awaited decision on the final cuts to Germany solar feed-in tariff (FiT) has arrived.

The federal government and states have agreed to cap the FiT when installed solar capacity reaches 52 gigawatts (GW), reports Reuters.

And the cuts which were scheduled for April 1 will remain in force. Those cuts reduce payments for solar fed into the grid by 20-30%, depending on the size of the system. 

Starting July 1, payment will decline 1% a month. g July 1. Projects between 10 kW-40 kW will receive 18.5 eurocents/kWh and plants larger than 10 MW won’t receive a premium rate at all. Here are more details.

Solar fed into the grid will now get market prices and Some states and the Social Democrat and Green Parties opposed the cuts because their economy now depends so much on the solar industry, and because solar is so vital in reducing greenhouse gas emissions and replacing nuclear energy.

A mediation process ensued, resulting in today’s agreement.

Germany has nearly half the world’s installed solar at 25 GW. 1.1 million solar systems have been installed since the FiT began in 2001, creating 150,000 solar jobs.

China stands ready to take up the slack if Germany’s solar market slows. It added 2 GW of solar last year and is targeting 5 GW in 2012, shooting for 15 GW by 2015 in its 12th Solar Five Year Plan.

The Plan aims to further reduce solar prices by increasing capacity and the efficiency of solar cells. The goal is to reach $1,111 per kW by 2015 and $794 per kW by 2020.

"China is looking very reactive – to a large extent the Chinese market depends on what happens in Europe," Ash Sharma senior PV research director at IMS Research, told Recharge News. "If we see the European markets really falter this year, then we could easily see 8 GW, 10 GW installed in China."

More on China’s Solar Five Year Plan:

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