Historical Overview of the Solar Industry in Germany

From time to time we take you back to one of our past reports to present the state of an industry as it was viewed when it was written. This time, we look at the solar industry.
Since 2003 Germany has experienced strong growth in Solar PV capacity, reaching 9,151 MW by 2009. Historically, 98% of total solar PV capacity was grid-connected applications and of this 96% was grid-connected distributed generation. Off-grid PV applications are less important, whereas grid-connected PV systems are increasing rapidly. The reason is that the new market introduction programmes favour on-grid applications with the result that the majority of companies focus on the supply of grid-connected systems. In recent years, Germany has executed important programmes in the field of PV, which have triggered substantial results in market development and technology. Growth is expected to slow somewhat in the near term following a 9% to 11% feed-in tariff cut in January and a planned second cut in the second half of this year.
Feed-in tariffs are expected to be revised downwards by 16% in July for roof top mounted systems and 11% for ground mounted systems. However, the bonus for self-usage of PV-generated electricity is to be increased.This will result in a surge in new installed capacity before the July cut off date, and a decline in new capacity in the second half of the year.
Under the feed-in tariff scheme 188 MW of new capacity was installed in 2009. This was projected to fall to 169 MW in 2010. However, after plans for revised feed-in tariff in July were announced, the estimated 2010 figure was reduced to 147 MW.
Declining module prices is the cause of feed-in tariff reductions. In 2009, the average price of roof-integrated systems (≥100 kW) fell from €4,216/kW to €3,135/kW. Prices of 5 kW residential roof top installations also fell to €3,200/kW in the first half of 2010 and are expected to fall to €3,000/kW in the second half of the year with a subsequent decline to €2,700/kW in the first half of 2011. Industry insiders expect grid parity to be reached sometime from 2012 to 2015, if electricity prices reach a figure between €0.23/kWh and €0.24/kWh.