Germany’s Solar Surge Leaves Biggest Market Steady in 2011

German solar power installations surged in December as developers rushed to finish projects before subsidy reductions, keeping the market for new facilities powered by the sun near the record achieved in 2010.

Developers installed panels with 2 gigawatts to 3 gigawatts in capacity last month, meaning installations for the full year will be near the 7 gigawatts recorded in 2010, the BSW-Solar lobby group said in an e-mailed statement.

The figures add to pressure on Chancellor Angela Merkel’s government to rein in subsidies that helped trigger a boom over the past three years, making Germany the world’s biggest market for solar power. They also indicate strength in demand that may help offset a plunge in prices for panels, which has depressed the shares of manufactures from Q-Cells SE (QCE) to LDK Solar (LDK) Co.

“That’s probably the largest end of year rush ever,” Jenny Chase, the lead solar analyst with Bloomberg New Energy Finance in London, said by e-mail. “The German government’s attempt to use the ratcheting down feed-in tariff mechanism to bring the country’s market back to 3.5 gigawatts a year is not proving notably effective.”

The strength of the installations probably will trigger an automatic 15 percent cut in subsidies beginning in July, the lobby group said.

New Energy Finance had expected installations from 6 gigawatts to 6.5 gigawatts last year. Germany installed about 7.4 gigawatts of solar panels in 2010 before Merkel’s government trimmed subsidies. About 3.4 gigawatts of panels were installed in the first nine months of the year, according to Bundesnetzagentur, the grid regulator.

Solar Boom

Mild weather in December and lower prices for panels helped trigger the surge, Carsten Koernig, the head of the lobby, said by phone.

The country’s solar industry struggled with slowing demand in the first half of last year amid rising competition from manufacturers in China. Berlin-based module maker Solon SE (SOO1) and Solar Millennium AG (S2M), with headquarters in Erlangen, filed for insolvency last month. Q-Cells is looking for a buyer.

Last month’s figures leave Germany on track to exceed the 52 gigawatts it aims to install by 2020, based on its National Renewable Energy Action Plan, New Energy Finance said.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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