Wednesday, January 13, 2010

"Germany moves toward trimming solar power incentives" and "France Cuts Solar Tariffs by 24%" (FSLR)

Investors must bear in mind that solar is less a business than it is a subsidy conduit.
A twofer. First up, Reuters:
The government, photovoltaic companies and consumer lobby groups moved closer on Wednesday toward an agreement on trimming state-mandated incentives for solar power to reflect a steeper overall slide in costs.

Although no decision was reached at the meeting, officials at the two rounds of hearings at the Environment Ministry in Berlin said they expected a decision on moderate reductions in the feed-in tariffs to be made soon....

...A spokeswoman for the Environment Ministry said the ministry would likely make a new proposal next week, which would then be discussed by the ruling parties. It was not clear if the next cut in feed-in tariffs would be July 1 or on January 1, 2011.

Any added reduction in the state-mandated fees that utilities pay for photovoltaic power are expected to be moderate to avoid damaging this growing sector and its thousands of jobs....MORE

And from

France today announced that it is cutting its solar feed-in tariff for rooftop systems from 55 euro cents to 42 euro cents, a 24% reduction in its solar-incentive system. Solar companies and investors have been in panic mode about an upcoming feed-in tariff cut from Germany, the world's biggest solar market by far, but the French reduction is significant.
Is the French reduction a harbinger of worse to come from Germany? The German environmental minister has been quoted recently as saying an announcement about the feed-in tariff cut could be made within days.

There are some important distinctions to be made between France and Germany's solar markets. First and foremost, France is a blip compared to Germany on the solar power global grid. Germany represents between 50%-60% of the global solar market, while France, even breaking into the Top Ten in 2009, represents a mere fraction of Germany's solar dominance.

However, France is a growing solar market, and an important one, so the feed-in tariff reduction is reason for solar companies to pause and reflect on the significance of a 24% reduction. It probably won't keep solar companies from chasing business in France, though.

The big solar players like First Solar(FSLR), SunPower(SPWRA ) and the Chinese solar gang led by Yingli Green Energy(YGE), Trina Solar(TSL) and Suntech Power Holdings(STP) are all anxious to exploit new feed-in tariff geographies ahead of the German tariff reduction....MORE

Remember this headline from a few weeks ago?

UPDATE "...First Solar eyes Blanquefort for French plant" (FSLR)