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Will Repeated Solar Feed in Tariff Changes by France Drive Away Investors

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France is going to reduce the Solar Feed in Tariffs by 12% for Ground Mounted Solar Installations from September 2010 according to a Bloomberg Report.The report led to a sharp decline in French utility EDF’s shares.This is not the first change as France has modified the Solar Feed in Tariff Law by 2-3 times in the last One Year.While the sharp drop in Solar Modules Prices is one of the reasons behind the frequent changes,it does not help the Investor Confidence.Note Renewable Energy is currently more expensive than Fossil Fuel Energy and requires incentives by the government for their promotion.Investors in Solar Plants make money over the years through a guaranteed payment from the Government for the electricity they generate which is known popularly as Feed in Tariff.While Changes are necessary for this Subsidy Scheme,ad hoc changes like that being done by France is a recipe for disaster.Investors look for certainty in Green Policy before investing and haphazard changes by Regulator is a Red Flag for Investors.Note Feed in Tariff Policy has frequently misfired like in the case of Czech and Spain in 2010 and 2009 respectively.

Even Germany has imposed yearly changes on FIT , still it has managed to become the solar capital of the world.2010 was an exception due to a mid year change,still Germany is going to install more solar capacity in 1 month than US’s entire historical installed capacity.This is due to a well laid out policy which instills confidence in investors.The French Government’s FIT cut has good reasons since ground mounted plants have lesser costs and most European countries like Spain are trying to boost residential solar installations.However rapid fire changes are not the answer to a well thought of careful FIT policy.

France to Cut EDF Solar Electricity Price by 12%, Figaro Says – Bloomberg

The French government plans to cut the price paid by Electricite de France SA for solar-generated electricity by 12 percent, Le Figaro reported, citing an unidentified person close to Finance Minister Christine Lagarde.The government yesterday informed the CRE energy regulator of its plan, the newspaper said.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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