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German Solar Subsidy to Drop to Third of Japan’s on Installs

Germany, the biggest solar market by installed capacity, will this year reduce subsidy payments to power-plant developers to a third of Japan’s support level as installations continue to outpace government targets.

Germany’s feed-in-tariff will shrink 1.8 percent a month from August through October, the Bundesnetzagentur grid regulator said today in an e-mailed statement. In October, it will for the first time drop to below 0.1 euros ($0.13) a kilowatt-hour for plants sized between 1 megawatts and 10 megawatts.

While German first-half solar installations fell 41 percent over the same period last year, they’re still expected to exceed the government’s target of between 2.5 gigawatts and 3.5 gigawatts for the entire year, said Jochen Homann, the head of the regulator.

Germany, which added more than 7 gigawatts of solar panels in each of the past three years, installed 2.57 gigawatts in the first half. Europe’s biggest economy began offering its industry-changing feed-in tariff for solar in 2004, building on previous smaller incentive programs. German consumers finance the feed-in-tariff via a surcharge on their electricity bills that jumped 47 percent to a record this year.

Japan, which also seeks to cut solar subsidies to reduce the cost of its own clean-energy expansion, currently pays solar developers 37.8 yen ($0.39) a kilowatt-hour.

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