German Solar Installs Double in Setback to Angela Merkel

German installations of photovoltaic solar panels more than doubled in the first half, a setback for Chancellor Angela Merkel’s effort to damp surging industry growth that’s being subsidized by electricity consumers.

About 4.37 gigawatts of solar panels were installed, above a government target of 2.5 to 3.5 gigawatts for the whole year. About 1.71 gigawatts were connected in the period last year, federal grid regulator Bundesnetzagentur said on its website.

“We could see another record year in Germany,” Martin Simonek, an analyst for London-based researcher Bloomberg New Energy Finance, said today by phone. “Developers can source panels at very low costs so even with the current monthly subsidy reductions, the German market remains very much alive.”

Merkel is trying to contain growth on concern that it is increasing power bills. Installations in the largest market by total capacity reached a record 7.5 gigawatts in 2011. The government and opposition in June agreed to monthly reductions to solar subsidies taking effect, retroactively, from April.

About 1.79 gigawatts of panels were added in June as developers rushed to connect plants before an extension of the subsidies ended at the month’s end. Further gains may come in September as regional and central governments in arbitration agreed to give developers of large-scale ground-mounted plants until the end of the month to connect projects, Simonek said.

New Energy Finance forecasts installations of 6 gigawatts to 8 gigawatts this year, and 2.5 gigawatts to 3.5 gigawatts in 2013, in line with Merkel’s target.

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