French Solar Price Cuts May Be Followed by U.K., Czechs, BNEF Analyst Says

Aug. 25 (Bloomberg New Energy Finance) -- France’s cuts to feed-in tariffs earned by ground-mounted solar photovoltaic installations may be duplicated elsewhere in Europe as solar- panel prices fall, according to Bloomberg New Energy Finance.

Rapidly declining costs associated with making solar PV panels are forcing governments to reduce the subsidies for clean energy shouldered by consumers when they pay for electricity from renewable sources, an analyst at London-based BNEF said.

“When the tariffs were set, governments did not realize modules and systems would become so low-cost, so fast,” Jenny Chase, lead solar analyst for BNEF, said in Zurich.

France’s ministries of sustainable development and ecology two days ago announced cuts to feed-in tariffs paid to producers of electricity from solar PV beginning Sept. 1.

“As suspected, the French government has seen the upcoming boom in ground-mounted PV projects, and acted decisively to reduce costs to consumers,” said Chase. “We expect similar moves to cut PV feed-in tariffs from the governments of the U.K., the Czech Republic and Ontario” in Canada.

Feed-in subsidies to ground-mounted stations in the north and south of France and French overseas territories will be lowered by 12 percent, according to a statement yesterday. These will fall to 33.12 euro cents (42 U.S. cents), 27.6 euro cents and 35.2 euro cents a kilowatt-hour.

Chase said the cuts would be unlikely to hamper the rate at which ground-mounted systems were installed.

“This is expected to have little effect on installation volumes, as most types of systems will still be economic at the lower rates, though it will reduce developer margins a little,” Chase said.

Also included in the cuts are residential building integrated installations of more than 3 kilowatts, building integrated installations on education or health-care structures and “simplified building integration” installations on all buildings.

Residential building integrated installations with a capacity of less than 3 kilowatts dodged the changes, keeping the highest tariff at 58 cents per kilowatt-hour.

To contact the reporter responsible for this story: Catherine Craig in London at ccraig13@bloomberg.net.

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