Solar Feed in Tariff in France Halted as Renewable Energy Subsidies become “veritable speculative bubble”

4 Dec, 2010 by
France,Solar Energy

France has halted its solar feed in tariff bubble putting a moratorium on new applications for installing solar panels above for 3 kw installations.This has been done after applications for solar panels exceeded the 500 MW per year target set up by the French ministry.The Prime Minister called the solar feed in tariff subsidies reaching a “veritable speculative bubble”.France has already changed its solar feed in tariffs 2-3 times in 2010 as it tries to fine tune the subsidies so that renewable energy investors earn a decent return.However the fast decrease in solar panel prices has caught the bureaucrats off-guard which is not surprising.Feed in Tariffs in general have been badly designed by most public authorities around the world leading to huge bubbles.Czech has suffered from the biggest solar subsidy bubble on which it recently cracked down through taxes,50% cut in tariffs and other measures as electricity rates increased sharply as subsidies ballooned.Spain and Italy have found their Feed in Tariffs leading to runaway subsidies while Germany which has the most successful FIT program too had to cut FIT by a single ad hoc measure in order to prevent a bubble.

The French  Regulator has said that 2011 might see 1300 MW of solar installations as returns become lucrative with the decline in solar panels prices.The Regulator also plans to reduce the speculation by making it mandatory to install panels in 18  months after permitting .France will have 860 megawatts of photovoltaic capacity installed and connected to the grid at the end of 2010 and a total of 2,150 megawatts by the end of next year, according to the regulator.The proposed halt would apply to projects for which no payment has been made before yesterday to the network operator to connect solar panels to the grid.These measures have been opposed as “wretched” by the French solar industry association which again is not surprising when you consider the history for FIT programs.

France Plans Temporary Freeze, New Rules for Solar Projects

France plans to temporarily freeze new solar projects as part of a plan to end a “veritable speculative bubble” that has emerged in the industry, French Prime Minister Francois Fillon said today.

“The flourishing of solar in France, which is faster than expected, comes at a cost to local government and consumers,” Fillon said in a statement today. “Development relies on a feed-in tariff for electricity that is very favorable to producers.”

Fillon didn’t announce a further reduction in the tariffs paid by Electricite de France SA for solar power as reports this week suggested would be the case. Instead, the prime minister said a new regulatory framework would be put in place by March. Long-term targets for solar development have already been surpassed “justifying” the new rules, he said.

Solar Feed in Tariff in France Halted as Renewable Energy Subsidies become “veritable speculative bubble”

Planned Czech Solar FIT cuts will heavily favor subsidies to Small Distributed Rooftop Installations

30 Oct, 2010 by
Solar Energy

Czech has seen the biggest Solar Growth Explosion compared to its size powered by extremely generous feed in tariffs.This has made Czech one of the top solar installers in the world and led to a huge public backlash.The Czech government has responded by proposing to bust the Solar Energy Bubble by drastically cutting down the Feed in Tariffs.The administration is also trying to reign in the ballooning subsidies from existing solar plants by imposing taxes on solar plants and carbon credits.This is being done as the Czech consumers face a 15-25% increase in electricity prices next year.The country had little option as its very badly designed tariffs had led to  a situation where Czech Industry faced the prospect of becoming uncompetitive.

The Czech legislature has passed a law which will sharply cut the subsidies and heavily favor small residential installations under 30 kw.This follows the trend in other European countries like Spain and Germany which have changed FIT to favor small distributed solar owners in comparison to larger solar projects which are owned by large organizations.UK has alos implmented a FIT policy which had led to a huge boom in small solar installations avoiding the mistakes made by Spain and Czech.

Czech lower house cuts support for new solar plants – Reuters

The Czech lower house approved a bill on Friday that cuts most of the country’s exceptionally generous support for photovoltaic power plants newly built as of March 2011.

The new law, which still requires clearance in the parliament’s upper house, limits support only to those newly built photovoltaic plants on buildings, not on land, and only to those whose capacity does not exceed 30 kW.Existing plants built by March 2011 will keep operating under the current favorable conditions.

Most Electricity Expensive USA State Hawaii implements a Limited Renewable Energy Feed in Tariff despite Utility Opposition

21 Oct, 2010 by
Renewable Energy,Solar Energy,USA

Hawaii is the most electricity expensive state in the USA with retail electricity rates of as high as 28c/Kwh which is almost 40% more expensive than the second most state.The island state is also the most heavily fossil fuel dependent state making the government target a 70% renewable energy target by 2030 with 40% coming from Green Energy and 30% from Energy Efficiency.However the state has not found much private investment due to a lack of a coherent Green Incentive Policy.Unlike California which has seen a massive increase in solar installations,Hawaii has been a laggard mostly.The State seems to have made some progress by implementing a limited Green Feed in Tariff (FIT) Policy for installation under 5 MW.The Feed in Tariff Rates however are pretty poor,even less  than the retail electricity rates making the success of the Green Policy a big question.

The Feed  in Tariff Rates are quite Low but Something Better than Nothing

The HPUC has given a FIT rate which is quite low for solar energy and has failed to implement a policy for installations between 500-5000 KW.Also the FIT rates for Concentrating Solar Power (CSP) does not make sense at all for under 500 KW installations.Don’t think there exists a single decent producer of such small CSP plants.The FIT Policy was passed despite stiff opposition from the island’s utilities who questioned the Feed in Tariff as a good Green Incentive.The huge success enjoyed in Europe by FIT did not make a big impression.Note 80% of the world’s solar installations depend on Feed in Tariffs.While there have been bad implementation cases of FIT in Spain and Czech,there have been huge successes in other countries like Germany and UK.HPUC  rightly decided to go ahead as trial and errors would be needed . It won’t lead to a huge boom in solar in Hawai due to poor returns however it should lead to some boost to existing solar producers or those who were going to install solar anyway.

Owners of Solar Panels in Hawaii to Benefit from Feed-In Tariff – GetSolar

Hawaii’s plans for a feed-in tariff — which have been in the works for quite some time — are one step closer to being realized, thanks to a decision Wednesday by the Hawaii Public Utilities Commission (HPUC). The decision is part of a broad push in Hawaii to get 40 percent of the state’s electricity from renewable resources by 2030.

According to the regulator’s ruling, homeowners and commercial property owners who install solar panels in Hawaii will get paid for any excess electricity they generate. Those who sign up and participate in the program will get paid 21.8 cents for each kilowatt hour (kWh) that is fed back into the electric grid. Since the going rate for residential electricity is higher on many parts of the islands, the feed-in tariff will really be best suited to homeowners — and businesses — that have solar energy systems that produce more electricity than they use on an annual basis.

Why is United Kingdom Reviewing Feed in Tariffs for Green Energy just 6 months after Starting it

29 Sep, 2010 by
Renewable Energy,Solar Energy

United Kingdom is going to review the Subsidies given to Renewable Energy just 6 months after having started the scheme with much  fanfare in April 2010.The Feed in Tariffs given to Solar Installations has led to a mini boom with thousands of homes taking advantage to the scheme to install solar panels.Companies have also taken advantage by offering finance and installations schemes to bolster their business.The Subsidy Burden has also not been too high as the installations despite exponential growth have been on a very low base.Besides the Green Subsidies are borne by Electricity Consumers without adding to the Fiscal Deficit burden of the Government.The move comes as a big surprise as the Ruling Party has said that it its Pro-Green and will help in increasing  Alternative Energy in the United Kingdom.

United Kingdom a Laggard on Renewable Energy

UK has been the biggest laggard in Renewable Energy amongst the European Union.Despite being a leader in Offshore Wind,it severely lacks in other forms of Green Energy like Solar,Biomass etc.It has been very late in introducing a  Feed in Tariff Scheme which has been a huge success in Germany and other countries.While there have been booms and busts caused by poorly designed FIT schemes in Czech and Spain,UK does not suffer from this problem.The Subsidy Scheme adopted by UK favors small distributed installations which is currently the aim of the other EU countries.This review has led to uncertainty in the minds of Green Investors as Government Subsidy is essential for reasonable returns.

Why UK is Reviewing the FIT

The Labour Government which implement this Green Policy has changed and the new PM David Cameron is trying to radically change the Government Policy.He has sharply curtailed the UK Budget and may want to change the Opposition Party set Green Policy as well.This seems to be the only justification behind this move which can only be described as erratic.

Uncertainty over UK solar PV feed-in tariffs unsettles investors

The feed-in tariffs were introduced in the UK on April 1, 2010 and cover
PV, wind, hydro, and anaerobic digestion with an installed capacity up to 5
MW. There has been some speculation that the FITs for solar PV could be
reduced before 2013.

“Cutting rates now would seriously affect investor confidence, not only
in PV, but also in other government backed renewable schemes such as the
forthcoming Renewable Heat Incentive,” said Stuart Pocock, technical director
of the REA.

The Department of Energy and Climate Change has said it will not clarify
the position until after the comprehensive spending review on October 20.

In a statement, Pocock urged the government to make an immediate
announcement confirming that the published tariff rates will not be reduced in
advance of the scheduled first review, due to take place in 2013.

However, Michelle Thomas, partner and head of the clean energy and
sustainability group at international law firm Eversheds, said that the
position is not at all clear and it should not be assumed that a reduction is
definitely going to happen.

“Any change to the FIT regime would not only be significantly detrimental
to the UK solar industry…[and] could clearly cause the UK to be seen as too
risky an environment within which to invest,” Thomas said\. .

The UK FIT scheme is funded by a levy on consumers’ and industries’
electricity bills.

Czech removes Tax Holiday to Further Deflate the Green Energy Bubble

14 Sep, 2010 by
Renewable Energy,Solar Energy

Czech Republic has seen a huge Solar Boom due to an ill designed Feed in Tariff Scheme for Green Energy.This has led to a huge mushrooming of Solar Installations driven by  30% Plus Annual Returns for Renewable Energy Investors.The Czech citizens have to now bear the burden of this ill conceived subsidy scheme with electricity rates expected to rise between 15-25% in 2011.The higher costs of Solar Energy will be passed onto Electricity Consumers.The Czech Government has already decided to cut FIT rates for Solar by 50% in 2011 with strict caps which will surely end the Massive Bubble in Solar Energy.The Government is now trying to further strangle the growth of Renewables through removal of a 5 year tax holiday on new installations.

Czech is a Poster Boy of how not to implement a Feed in Tariff Scheme.While other countries like Spain,Greece have also faced Solar Booms,the Czech Bubble compared to the size of its Economy has been spectacular.The removal of Tax Benefits will further lower the returns for Green Investors which should probably eliminate the make the Czech Renewable Market next year.

New Czech proposal takes aim at solar boom – Reuters

The Czech Finance Ministry has proposed a new law that would eliminate the five-year tax break for new investments into renewable energy in a bid to curb booming solar projects in the country.

The law, which the ministry has proposed to the centre-right government, would only apply to new projects and not to those already approved. The measure would take effect on January 1, 2011.

New Czech Renewable Energy Policy to Bust the Solar Boom with a 50% Subsidy Cut

27 Aug, 2010 by
Biomass Energy,Europe,Solar Energy,Wind Energy

Czech Republic came out with a Renewable Energy Framework which will finish off the Solar Sector in the country if passed in the current form.Czech despite its small size has become the 3rd largest market for Solar Energy in Europe driven by high Feed in Tariffs.These guaranteed electricity rates have led to  a Boom in the country due to IRRs in excess of 30%.The Parliament had already overwhelmingly voted to overhaul the country’s Solar FITs in March.In the new plan submitted by the Czech government to the EU,there are limits imposed on each type of renewables  biomass,solar,wind etc with emphasis given to Biomass Energy.Czech Republic has a EU set  target of 13%  Energy generated from Renewables.Wind and Solar Industry Groups have already started crying blue murder as the proposed FIT in 2011 for Solar will be cut by almost 50%.This will make it almost uneconomical for a solar  installer to put solar panels in the country and  don’t be surprised if you see a 90-95% drop in 2011 Czech Demand compared to 2010.

The whole story of Czech Boom and future Bust is predictable and has already been played out in countries like Spain and Greece earlier.Like Spain,Czech electricity customers might see a 10-15% rise in electricity prices due to the high guaranteed payments to mushrooming solar installations.With the Czech Republic,implementing a Fiscal Austerity program involving pay cuts to public workers and other severe cuts in public expenditure,such huge payments to Renewable Energy seems an unnecessary luxury.Some more thought and preparation by the authorities would have avoided such a Failure.

Czech government adopts plan to rein in renewables – Reuters

The Czech government approved a renewable energy framework plan on Wednesday aimed at curbing the kind of subsidies that have led to a solar boom that ranks as Europe’s third largest.

The plan, adopted late in the day, calls for a cap on tariffs for solar energy of about half the current level and seeks mandatory recycling of old solar panels. It also seeks annual limits on subsidies for wind and solar power.

The legislation came after the combination of a drop in the price of solar panels and high fixed tariffs brought the return on the initial investment for some plants down to as little as three years.

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