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Home > News > Market & Policy

European Incentives in Flux as Demand Spreads Globally

Spain, Germany and the U.K. have recent activity updates on PV incentives.

Over the past few weeks, European incentives have shown their volatile nature in light of the regions financial crisis--with at least one country (Spain) citing internal debt as the reason for its subsidy cuts. According to Lux Research, the three markets with recent activity are:


1. Spain. The country has suspended payment of all feed-in tariffs for new solar projects, effective immediately.

2. Germany. The largest solar market worldwide has seen talk of a 1 GW cap on annual installations subside. However, the notion of cutting Feed-in Tariff (FiT) levels monthly (they are currently reduced annually) remains very much alive, though whether or not the plan could be implemented by April 1 is unclear. Germanys Environment Minister, Norbert Roettgen, has stated that he would like to stabilize the market at 2.5 GW to 3.5 GW of new installations per year, without a hard cap.

3. U.K. After the Department of Energy and Climate Change (DECC) moved to immediately halve the U.K.s feed-in tariff for residential and commercial systems, that countrys Supreme Court declared the cuts illegal. After an appeal by the DECC, the Courts ruling was upheld. The proposed lower FiT rates will now come into effect beginning March 1, 2012.


Though Spain and the U.K. have been relatively weak European markets of late, this sudden news will certainly stunt any potential growth. Further, monthly incentive reductions in Germany would be hurtful--even smaller residential systems usually require at least four weeks for permitting prior to installation, meaning system owners would not have a certain idea of the incentive they would receive prior to installation.  

Broadly, the cuts serve to advance an already present trend in solar demand: growth wide (into many new markets and geographies) rather than tall, or in higher volumes. Expect slowing demand growth short-term while Europe declines, prior to the rise of emerging markets like China and South Asia.



For more information, please send your e-mails to pved@infothe.com.

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