Germany Added Record Solar Panels in 2012 Even as Subsidies Cut

Renewable-energy developers in Germany, the world’s biggest solar market, added a record number of panels last year even after subsidies were cut back.

Solar installations climbed to 7,634 megawatts, up 2 percent from 7,485 megawatts in 2011, according to figures from the Bundesnetzagentur grid regulator and the Environment Ministry. That was more than double the government’s maximum target of 3,500 megawatts.

Fourth-quarter installations, which fell 66 percent compared with the previous year, show that the new system of reduced subsidies that took full effect from October is working, said Ingo Strube, a spokesman for the Environment Ministry in Berlin.

“More than 80 percent of installations came in the first nine months,” he said today by phone. Environment Minister Peter Altmaier expects developers to add 4,000 megawatts to 4,500 megawatts this year, Strube said.

Chancellor Angela Merkel has cut solar-power subsidies to reduce the burden on consumer electricity bills of Germany’s renewable-energy expansion. Still, the above-market tariffs remain at levels that allow developers to profit, while component prices have continued to drop amid an oversupply.

The German state of Saxony plans to present a proposal to reform the country’s clean-energy subsidy system to the upper house of parliament by the end of this month, German newspaper Die Welt said, citing a draft bill. The proposal, which would require utilities to source a certain percentage of their power from renewables, follows the Swedish quota model and seeks to reduce the cost of the renewable expansion by favoring more efficient sources, the newspaper said.

Altmaier plans to propose changes to the system in March to prevent a voter backlash against rising energy costs before an election in the autumn. Subsidies this year will amount to about 20.4 billion euros ($27 billion), paid for through consumers’ power bills, according to the country’s four main grid operators.

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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