Germany Makes Last Minute Adjustments to Feed-In Cuts

With April 1st looming, the day when severe cuts to Germany’s solar feed-in tariff (FIT) come into force, there are some last minute adjustments.

The cuts will be delayed until September 30 for ground-based solar plants built on brownfield or former military sites.

Investors that already have projects planned and registered before February 24 are also not subject to cuts unless they aren’t completed by June 30.

To encourage homeowners and businesses to use the electricity they generate, the government will now only pay for 80% of the electricity they send to the grid.

For larger plants, 90% will be eligible for tariff payments.

The other elements of the cuts remain the same: solar PV tariffs will be reduced 20.2%-29%, and will go down 1% a month, starting July 1. Plants larger than 10 MW won’t receive a premium rate at all. Here are more details.

Feed-in tariffs pay people a set amount (above-market rates), guaranteed for 20 years, for solar electricity they send to the grid. That’s made Germany a solar powerhouse – the world leader – as people rushed to install solar to provide a profitable revenue stream.

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

Germany’s goal is to install half the solar it did in 2010 and 2011, when it hit record 7.6 GW both years. Under the new plan, tariffs will go down more each quarter if solar capacity expands beyond 3.5 GW per year; if installations lag, the cuts will be eased.

The deal came after weeks of heavy negotiations, where the upper house (Bundesrat) representing the federal states, threatened to form a two-thirds majority to thwart government plans to cut the tariffs.

Those states are controlled by opposition Social Democrats and Greens, which oppose cuts to the proposed incentive cuts. Jobs and investments are at stake in these states, where solar companies have a strong presence.

German solar companies, many of which pioneered the industry, are struggling as it is from Chinese competition.