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No. 063/10 | Berlin, 06.05.2010

Bundestag adopts modification of solar power feed-in tariffs

Federal Environment Minister Röttgen: "Amendment ensures further expansion of solar power generation."

The German Bundestag adopted the amendment of the Renewable Energy Sources Act (EEG) today. It significantly reduces the feed-in tariffs for solar power generated by installations on buildings and in open spaces as per 1 July 2010. Federal Environment Minister Röttgen: "The amendment reflects the price cuts arising from the market introduction and mass production. It presents the necessary corrections to reduce the feed-in tariffs to an appropriate level, to limit costs incurred by the consumers while at the same time expanding the share of solar power in total power generation."

These corrections were necessary as market prices dropped by around 30 per cent last year. Therefore the amendment now provides for further reductions of the feed-in tariffs in addition to the original degression rate stipulated in the EEG: 11 per cent for solar farms on land converted from other uses (conversion areas) and 16 per cent for roof installations. At the same time the EEG assumes a much wider expansion of the photovoltaic market than previously expected. The targeted market volume was doubled to 3,500 MW installed photovoltaic peak capacity per annum. The proposed cuts in tariffs are appropriate. The expanded financial incentive for consumers themselves to use the solar power they generated will trigger further technical innovation.

The dynamic expansion of photovoltaics in Germany is a success story. In 2009 around 3,800 MW of new photovoltaic systems were installed, bringing the current total photovoltaics output to around 9,800 MW. German companies are at the technolocial forefront, the photovoltaics sector has a large export share and is creating a large number of skilled jobs in eastern Germany in particular. Initial estimates in Germany give a figure of around 10 billion euro for photovoltaic system investments in 2009. This secures a total of around 65,000 jobs in the sector and related trades.

If the dynamic market development continues grid parity may be reached as early as 2013. This means that solar power will then be generated at costs corresponding to those of regular consumer electricity tariffs. The EEG amendment prepares the way for such a development as it will promote consumers' own consumption to a higher degree: private households that do not feed in solar electricity but consume it themselves will gain up to 8 euro cent per kWh. Businesses will also profit from the amendment as the stipulation will apply to installations with a capacity of up to 500 kW, one hundred times the capacity of a typical single-family home roof installation. This provision on own-consumption will trigger further important technological progress, e.g. in the field of storage technology. Consumption of grid electricity will be reduced, thus easing the burden on the grid. This in turn will advance the integration of electricity generated from renewables into the grid.

In contrast to previous EEG stipulations, open space installations will continue to be promoted beyond 1 January 2015. Conversion areas allowing for tariffs pursuant to the EEG will also comprise land converted from residential building or transport use in addition to land converted from agricultural or military use. Open space installations can now also be promoted in a 100 m wide strip along the kerbside of motorways or rail tracks. The category arable land will not apply beyond 1 July 2010. There will be transitional stipulations for open space installations which have already reached an advanced planning stage.

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