German December Solar Installations Surge in Race to Beat Subsidy Cuts
The German solar market added an estimated 3 GW of solar capacity in the month of December as developers raced to add capacity before the next round of subsidy cuts sets in. [1] The country added an estimated 7.5 GW of capacity in 2011 highlighting its position as the world’s largest market for solar panels. The wave of installations was helped by Chinese manufacturers such as Trina Solar (NYSE:TSL) and Yingli Green Energy (NYSE:YGE) dropping panel prices in response to the industry glut. Panel prices are falling faster than subsidy cuts, helping the market grow despite the weak growth outlook in Europe.
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Low prices, future cuts help sales
The December sales broke the record for the highest installations in Germany in a single month. [1] As capacity increments continue to remain strong, subsidies in the country are expected to fall by 15% in July this year when the government reviews its subsidy policy for renewable energy.
The unexpected surge in panel sales may push the Merkel administration to make bigger cuts. Germany has one of the most progressive renewable energy policies in place, making it the largest market for solar installations in the world. Moreover, the talk of an annual cap on installations from the country’s economy minister, Philipp Roesler, also helped push more developers to complete installations by the end of the year.
Despite booming panel sales, two German solar companies filed for insolvency last month. [1] The local companies are unable to compete with Chinese players on costs and companies like SolarWorld have accused Chinese manufacturers of dumping panels at prices below the cost of production. SolarWorld is looking to gain industry support in Europe to start anti-dumping proceedings against these firms as it has done in the U.S.. Read more about this topic here: Suntech, Trina May be Hit As U.S. Trade Panel Looks Into Import Tariffs
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Notes:- German Solar-Panel Installations Break Record in Rush to Beat Subsidy Cut, Bloomberg [↩] [↩] [↩]