Bloomberg News

Germany Expects Installation ‘Rally’ to Beat Solar Cuts

April 13, 2012

Germany’s solar industry expects an installation rush over the next six months as developers try to beat planned subsidy cuts in the second-biggest market for sun power.

Developers have brought forward plans to install panels on concerns that reductions in feed-in tariffs scheduled to take effect between April 1 and Sept. 30 make later investments unfeasible, the BSW solar industry association said.

“We expect a ‘final rally’ during the next weeks but then a drastic downturn in the market in the fall at the latest,” Joerg Mayer, managing director of the BSW, said by e-mail. “Thousands of solar jobs are then at risk.”

Chancellor Angela Merkel’s government wants to cut the pace of annual solar installations by half after incentives for the industry pushed installations to a record 7.5 gigawatts last year, more than double targets. The reductions would take effect about a year after Merkel decided to exit nuclear generation after the Japan disaster and replace reactors with a mix of renewable and more efficient fossil-fired generators.

Katharina Cholewa, an analyst at WestLB AG, expects Germany to add 6 gigawatts of panels this year amid a “strong first half, a decent third quarter and a weaker final quarter compared to last year,” she said today from Dusseldorf.

The BSW at this point can’t give a reliable forecast for installations for the year because it’s too early amid parliamentary proceedings, David Wedepohl, a spokesman, said by e-mail today. Germany will probably install 8 gigawatts of solar power this year, the DIHK national chamber of industry and commerce said on March 9.

Jobs at Risk

The government has amended the reductions at least twice after protests from the industry and opposition politicians that the changes threaten tens of thousands of jobs and harm the country’s energy mix.

Lawmakers approved the cuts in a March 29 vote after the government had given developers of larger ground-mounted power plants until June 30 to complete projects. It had also pushed back reductions for solar plants built on sites such as former garbage dumps or former military bases until Sept. 30.

The Bundesnetzagentur, a federal regulator overseeing the energy sector, is still verifying solar installations for the first quarter and can’t make a projection or comment further, Renate Hichert, a spokeswoman, said today.

Electricity from solar panels rose 40 percent in the first quarter compared with a year ago, the BSW said this week. Solar panels generated 3.9 billion kilowatt-hours in the first three months of the year, enough for about 4 million households.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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