The long discussed changes to the German feed-in tariff are still in debate after a report released Monday by Germany’s regional government assembly called for a relaxation of the planned cuts. This means that the changes, which were originally planned to come into effect in April and have already been pushed back until June, may be yet again delayed. The bill we continue to pass its way through the German parliament over the next two months.

Whilst everyone appears to be in agreement that the feed-in tariff should be lowered faster than originally planned in light of dramatic price reductions in PV systems, there is controversy over much it should be lowered and how the structure of the tariff should be changed. There is a big debate for instance, concerning the level of a ‘self-consumption’ bonus, whereby producers of solar energy are rewarded for any electricity they use themselves rather than export to the grid. Also in discussion is the difference in feed-in tariff paid to ground mounted solar farms compared to rooftop installations.

Meanwhile, solar installers are experiencing a continuation of strong demand. At the end of 2009, the rate of new installations reached an all-time high with around 2GW installed in the fourth quarter alone as customers rushed to install before the 2009/2010 feed-in tariff drop. The threat of new cuts in the feed-in tariff are only increasing the incentive to install in 2010.

An interesting pattern is emerging, whereby the PV market experiences surges in the run-up to a feed-in tariff change. This cyclical pattern creates extra incentive for the government to decrease the feed-in tariff and looking at the market it seems that prices are set to fall further over the next year or so. These factors may well push us into the realm of parity with retail electricity prices in Germany by 2013.

In the UK, the feed-in tariff is unlikely to be altered before 2012, although we will carefully scrutinize the aftermath of the forthcoming general election. Already commentators in the UK are speculating that the UK may experience its own mini ‘PV-rush’ in the run up to 2012. However, as Germany has repeatedly shown, one ‘PV rush’ can lead to another.

Several of the thin film PV manufacturers (see previous article) have announced ambitious plans to start selling their products in large volumes. In particular, NanoSolar, Solibro, Solar Frontier and MiaSole are makers of the new “CIGS” type of modules that promise to achieve high efficiency and lower cost than the thin film modules currently available. It will take time for these new technologies to be accepted for their reliability, but it is likely that at least some of the companies offering these products will succeed. News has been announced that a solar park using Nanosolar’s modules is already under construction.

Several of the developers of large PV projects in Germany, such as Phoenix Solar and Gehrlicher, are currently testing new technologies whilst at the same time being cautious about their forecasts for the German market. Phoenix Solar recently announced that it cannot provide details of its development strategy until the details of the German feed-in tariff have been finalized.

These developments should act to further decrease the price of PV.

Sharp Solar announced last week that they will begin to match their photovoltaic (PV) products to individual customer needs in a move designed to meet the needs of the housing trade. Sharp Solar, part of the Japanese electronics company Sharp spoke last week during the Ecobuild exhibition in London and reaffirmed the massive popularity of Solar roofing systems. Sharp Solar announced that interest in PV systems has grown dramatically and that Ecobuild has also highlighted a growing desire from businesses to reduce their carbon footprint and of course hopefully benefit from government schemes which will come in to lay in 2010

The new PV systems will be part of a bespoke service which will allow a choice of colours and more importantly, can be installed on roofs more easily making the possibility of future retrofitting much more convenient as the systems can be locked in to place on brackets. The new ‘Slot and Play’ system which was exhibited in Earls Court last week will offer value to new low carbon projects across the UK where buildings are fitted with the latest PV technology.

Key to the success of companies such as Sharp Solar is the highly popular feed-in tariff, due to be introduced next year by the UK government. Members of the industry have, since November’s Energy legislation and the creation of the Energy and Climate Change department been highly supportive of the tariff system as they believe it will give a much needed kick start to renewable investment as it has done for example in Germany.

Solar Sharp have given their backing to the ‘We Support Solar Campaign’ along with other leading members of the industry, providing a lobby which is seeking to push solar to the forefront of the energy debate and seek key government legislation and funding which will be paramount to the initial success of investment in Photovoltaic technology in this country.

The crucial factor in the success or failure of the solar industry will of course be the feed-in tariff, designed to spur the growth of investment in the renewable sector by guaranteeing long-term, healthy yields to investors. The long-term contracts set a fixed, above market rate for megawatts fed in to the national grid by small (systems under 5MW), green energy producers. The fixed rate for the renewable energy is paid by the power companies, the additional costs of which are absorbed by all consumers adding a small amount to monthly utility bills. Certainly, in order to keep apace with the infrastructure of areas such as Germany and California many believe that the government should set a rate of around 50p/kWh unit generated and the ‘We support Solar Campaign’ will make this clear when they produce their research findings to the government at the end of March.

Regarding the possible findings of the report, Andrew Lee of Sharp Solar commented,

“I can’t pre-empt what it is going to say, but there’s a lot of work being done on feed-in tariffs. There are a number of different options how feed-in tariffs would work, and certain job creation scenarios. There could be 300,000 to 400,000 people in this market if the feed-in tariff is fit for purpose.”