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August 25, 2010Greater Fool Games continue in the Indian Stock Market as another small cap IPO gets Pumped
August 27, 2010Czech 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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[…] conditions.Note Estonia has only 1500 MW of Peak Energy Demand making the situation untenable.Like Czech Republic which is drastically cutting the support for Renewable Energy after a Solar Boom,Estonia too has decided on a order of magnitude of 50%.Electricity prices have already increased by […]
[…] so it needs to reduce the FITs to normalize the returns.Otherwise it might repeat a Spanish/Czech Renewable Energy Boom and Bust.The Country has ambitious target of generating 40% of its Energy from Renewable Sources by 2020 but […]
[…] 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 […]
[…] government sit up and decide to sharply cut the Green Subsidies being given to Solar Plants.While FIT will be cut by 50% next year for new solar installations,the government also plans to rein in the supernormal profits being […]
[…] 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 […]