Bankrupt Greece Sees a Huge Increase in Solar Subsidy Expense in 2012 Driven by Blind Governance

Solar subsidies in general have always been a boom and a bust story with very few countries managing to get it right. In Europe, in particular the feed in tariffs given by the Government to promote solar have always resulted in massive booms. This has strained the Government exchequer forcing it to take drastic measure which leads to the fledging solar industry in that country going bust. Greece is following the same storyline as seen in countries like Spain and Czech. Greece has a very generous feed in tariff in excess of 30 eurocents/kwh. This gives a return in excess of 30% to solar investors. This has led to a massive increase with solar capacity in Greece almost doubling to 800 MW with almost half installed in 2012 alone. Greece is currently running at 1200 MW annualized capacity addition which is clearly unsustainable for a country as small as Greece.

Also Greece is known to have a massive government funding problem and probably cannot even afford to subsidize even 1 Mw of solar power let alone 391 MW installed in 2012. The high rates of electricity tariffs being paid by Greece is seen when compared to the German feed in tariff which are almost half at 20 eurocents/kwh.

PV-Tech

According to Hellenic Transmission System Operator SA (HTSO), Greece has installed an additional 75MW of PV in July which brings its total amount of installed PV capacity in the first six months of the year to 319MW. This was a slight drop compared to last month, when statistics showed that the country installed a total of 97MW in PV capacity.

This boom comes despite the country’s flagging economy. It has been partly fueled by the country’s FiT scheme which enables permitted projects to receive incentives. The launch of the FiT scheme is in line with the Greek government’s target of generating 2,200MWp of solar power by 2020.