Solar Industry in Catch-22 Situation

Photovoltaic companies are under fire due to high costs of subsidies.
The German solar industry fears that the government is going to slap a subsidy cap on it, due to its rapid growth. It now wants to show ways to reach a competitive capacity for photovoltaics as quickly as possible with the help of a roadmap.

The Bundesverband Solarwirtschaft (BSW - German Solar Industry Association) is currently acting in an unusual role. To date, it could make policies for its clientele without restraint as the spearhead of a highly accepted industry: Be it with the Photovoltaik (PV)-Vorschaltgesetz [Photovoltaic Preliminary Act] in 2004 or the latest amendment to the Erneuerbare-Energien-Gesetz (EEG) [Renewable Energy Sources Act] – when there was something to demand, the BSW was there. Now, the association is under attack. This is because rising subsidy costs have tarnished the positive energy of solar energy.

The contribution paid by all energy customers with their energy bills to subsidise wind, solar and biomass energy is increasing by 70 percent at the end of the year to 3.5 cents per kilowatt hour. The four German transmission providers, EnBW Transportnetze, Tennet, Amprion and 50-Hertz announced this officially in mid-October. In total, German consumers will subsidise green energy with 13 billion Euros in the coming year. For an average household, this would mean additional annual costs of 60 Euros. The photovoltaics industry is considered the largest cost driver. The transmission system operators estimate that the solar upgrade in Germany this year will surge up by 5,500 megawatts to 9,500 megawatts.

And for consumers, it might get even more expensive yet. Despite the reduction of solar energy commission by 13 percent as of 1.1.2011, the expectation in the coming year is for a 9,500 MW photovoltaic upgrade. “Module prices are flexible enough and can decrease by 15 to 20 percent,” explains iSupply analyst Stefan deHaan. If the prediction of 9,500 MW occurs, then an impressive 28,899 MW of solar installations will be connected to the grid by the end of 2011. As a result, photovoltaics would easily overtake nuclear energy in its installed output: All the nuclear reactors installed in Germany amount to 21,000 MW.