German energy minister hails 'success' of solar subsidy reforms

July 10, 2013 at 12:03 AM
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BERLIN, July 10 (UPI) -- A year after lawmakers cut subsidies that triggered a costly solar panel boom, the move has succeeded in slowing it down, Germany's energy minister says.

Peter Altmaier said Monday the amendments to Germany's Renewable Energy Sources Act passed last year by Parliament slashing feed-in tariffs to photovoltaic panel buyers have proven to be "a great success" in the government's efforts to control the green surcharges paid by consumers on their electricity bills.

"The reforms work," he said. "The expansion of photovoltaics is now on a sustainable path."

Altmaier said the rapid proliferation of solar panel installations has slowed to the point where he declared new PV installations could be economically feasible without any subsidies by 2017-18.

The boom in installations had been encouraged by the once-generous feed-in subsidies and by German Chancellor Angela Merkel's decision to phase out nuclear power in the aftermath of the 2011 Fukushima nuclear disaster in Japan.

At the urging of the government, the German Bundestag voted last year to cut the feed-in tariff for rooftop installations with a maximum output of 10 kilowatts from 24.43 cents to 15.07 cents per kilowatt-hour.

The cuts have resulted in a dramatic slowing of the boom, Altmaier said.

"After three years with record numbers of expansions of about 7,000 megawatts per year, expansions this year for the first time are back on the intended path of 2,500-3,500 megawatts," he said. "This is a decrease of 40 to 50 percent, but still a considerable expansion, which is completely within the range of the energy transition."

Germany's quick growth of renewable energy sources have translated to big jumps in surcharges for consumers. Last year German electric grid operators RWE, E.ON, Vattenfall and EnBW warned the surcharge tacked onto consumer bills to help finance subsidies for wind and solar energy producers would jump by 47 percent in 2013.

The surcharges were set to rise from 3.6 cents to 5.3 cents per kilowatt hour this year, representing an overall price increase of about 7 percent for consumers.

They are needed to pay Germany's green energy generators $26.4 billion in feed-in tariffs as Merkel pushes to double renewable energy generation to 35 percent of Germany's total by 2020.

The newsweekly Der Spiegel reported an average three-person household using 3,500 kilowatts per year would see an extra $240 tacked onto their annual electricity bill due to the green technology surcharge hike.

Merkel has enjoyed broad public support for the switchover to clean energy and ratepayers have been willing to accept surcharges, but the steep hikes have hit after she promised in 2011 that prices would remain stable.

Altmaier this spring introduced a plan known as "strompreisbremse," or "electricity price protection," under which the levy would not increase by more than 2.5 percent on a yearly basis until the end of 2014, thus keeping it stable at 5.3 cents per kilowatt-hour.

But it stalled due to political wrangling between Altmaier and German Economics Minister Philipp Roesler, who has called for specified tariffs to be abolished altogether, and now seems likely to remain on hold until after the September parliamentary elections, Der Spiegel reported.

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