Germany’s EEG program instrumental in bringing Solar Energy Close to Grid Parity
Germany has been the poster child for Feed in Tariff success in promoting renewable energy.Germany Renewable Energy Law which was passed in 2004 led to a massive growth in solar and wind energy making the country a global leader in Green Technology.German Renewable Energy equipment producers are leaders globally and generate substantial employment in the country.The success of the FIT model in Germany has been replicated in countries across Europe to meet EU’s target of 20% renewable energy generation by 2020.Germany’s FIT success has led to subsidy problems leading the government to cut FIT tariffs by an additional 11-16% in 2010 on top of the annual FIT reductions.Despite these cuts,Germany will install a whopping 6-10 GW of solar installations in 2010 which is almost equal to 30% of the 20-25 GW global installation capacity till date.Despite much criticism about expensive subsidies,Germany’s FIT program has been instrumental in bringing solar energy closer to grid parity in such a short span of time.It is doubtful whether solar grid parity could ever be achieved without Germany’s EEG program\
Malaysia seeks to emulate German success
Malaysia has become the latest country to try and emulate Germany.The country which is lagging behind in GHG emission reductions plans to introduce a Feed in Tariff program for promoting renewable energy in 2011.Note Malaysia has a substantial solar manufacturing base with companies like Flextronics, First Solar,Q-Cells and Sunpower having factories located in that country.Other countries in South East Asia like Taiwan and Thailand are also implementing or in the process of implementing FIT programs in the country.USA is the only large country without a FIT program,relying instead on RPS mandates and tax credits to promote renewable energy.
Malaysia will implement the feed-in tariff (FIT) for renewable energy to enable users to sell excess power to the power grid as early as next year, said Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui.He said the Renewable Energy Act, which will introduce the FIT mechanism, is expected to be tabled in the Dewan Rakyat by year-end.
“The FIT is a mechanism that is tried and tested in many advanced countries, notably Germany, as a way to encourage people to use renewable energy such as solar, biomas or wind.”With the FIT, it will be easier for everyone, whether individual consumers or companies to generate renewable energy and sell their excess power back to Tenaga Nasional Berhad or regional utility companies such as Sarawak Electricity Supply Corporation and Sabah Electricity Board,” he told reporters after the launch of “Green Technology Roadshow 2010″ by Deputy Chief Minister Tan Sri Dr George Chan here Thursday.
“I’m quite sure, like in Germany and many other countries, when there is FIT, the solar panel installation and usage will go up. A lot of usage could bring the price of solar panels down,” he said.