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

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.