Photovoltaic Market in Belgium, Czech Republic, France, Germany, Greece, Italy and Spain

This is due to different energy policies and public support programmes for renewable energies and especially photovoltaics, as well as the varying grades of liberalisation of domestic electricity markets. After a tenfold increase of solar photovoltaic electricity generation capacity between 2001 and 2008, the newly installed capacity increased by almost 60 % in 2009 and reached more than 16 GW cumulative installed capacity at the end of the year.

A total of about 27.4 GW of new power capacity was constructed in the EU last year and 5.8 GW were decommissioned resulting in 21.6 GW of new net capacity. Out of the new installed capacity, 10.2 GW (37 %) was wind power; 6.6 GW (24 %) gas fired power stations; 5.8 GW (21 %) photovoltaic systems; 2.4 GW (9 %) MW coal fired power stations; 580 MW (2.1 %) biomass; 570 MW (2.1 %) oil; 440 MW (1.6 %) waste; 440 MW (1.6 %) nuclear power; 390 MW (1.4 %) hydro and 120 MW (0.4 %) CSP capacity.

The renewable share of new power installations was 62 % in 2009. In the following subchapters, the market development in some of the EU Member States, as well as Switzerland and Turkey, is described.

Belgium

Belgium showed a strong market performance in 2009 with new photovoltaic system installations of 290 MW bringing the cumulative installed capacity to 370 MW. However, most of the installations were done in Flanders, where since 1 January 2006 Green Certificates exist with 0.45 €/kWh for 20 years. In Brussels and Wallonia the Green Certificates have a guaranteed minimum price between 0.15 – 0.65 €/kWh depending on the size of the systems and region (Brussels 10 years, Wallonia 15 years).

Czech Republic

In the Czech Republic photovoltaic systems with more than 400 MW capacity were installed in 2009 bringing the cumulative nominal capacity to 460 MW. The law on the Promotion of Production of Electricity from Renewable Energy Sources went into effect on 1 August 2005 and guarantees a feed-in tariff for 20 years. The annual prices are set by the Energy Regulator. The Producers of electricity can choose from two support schemes, either fixed feed-in tariffs or market price + Green Bonus. The 2010 feed-in rate in the Czech Republic is CZK9 12.25 per kilowatt hour (0.48 €/kWh).

In view of the recent rapid expansion of solar photovoltaic electricity system installations, the Czech Government proposed a new law, which will allow the Regulator to increase the annual degression for new systems above the previous 5 % limit. The new law, which was passed by the Senate in April 2010, gives the Regulator the freedom to cut the feedin tariffs that distributors must pay solar plants as of next year, when it determines that the return on investment into solar plants falls below 11 years.

France

In 2009 France saw a massive growth in new photovoltaic system installations to 285 MW, but about 100 MW were not yet connected at the end of the year. This growth is the result of the 2006 revision of the feed-in tariffs introduced in France in 2000 with Decree Nº 2000-1196. The result was a moderate growth of the French PV market in 2006 (7.6 MW) and 2007 (12.8 MW). In 2008 installation volume picked up and new systems with 44.3 MW were added.

In November 2008, the French Government announced a new programme to substantially increase the role of renewable energy in France [MEE 2008]. The French Minister for Energy and the Environment, Jean-Louis Borloo stated that France intends to increase the use of solar generated electricity 400 times by 2020 to a total installed capacity of 5.4 GW. The latest change to the feed-in tariff structure was made in January 2010.
The main content of the Regulation is:

-Contract duration 20 years, linked to inflation, but the inflation indexing was reduced to 20 %.
-Additional investment subsidies are available as tax credits. 50 % of the investment costs for residential installations are tax deductible (max. € 8,000 for singles and € 16,000 for couples) and a lower VAT of 5.5 % on material and installation costs is applied. Accelerated depreciation of PV systems is possible for enterprises.
-Starting from 2012, the tariff for new contracts will annually decrease by 10 %.
-Only 1,500 kWh/kWp per year are bought from any fixed installation in the mainland (2,200 kWh/kWp for tracking) at the tariffs listed below. Any surplus will then be bought at 0.05 €/kWh. In Overseas Departments and Corsica, the caps for fixed and tracking installation are respectively 2200 kWh/kWp and 2600 kWh/kWp.

Germany

Germany had the biggest market with estimates in the range of 3.8 to 3.9 GW. The German market growth is directly correlated to the introduction of the Renewable Energy Sources Act or “Erneuerbare Energien Gesetz” (EEG) in 2000. As foreseen in the “Erneuerbare-Energien-Gesetz” (EEG) the feed-in tariffs were reviewed and the new law was passed on 6 June 2008 by the Bundestag (Parliament) and on 4 July 2008 by the Bundesrat (Federal Council).

In the revised law, the feed-in tariffs were reduced by more than 12 % from 2008 to 2009 and the degression for new systems increases from 5 % resp. 6.5 % to 8 and 10 % in 2010 and 9 % in 2011 and after. To limit the monetary effects of the feed-in regime to consumers without introducing a cap, the law has an additional provision to increase or decrease the degression rate if the market growth is above or below a certain volume in 2009, 2010 and 2011.

The German market took off after a slow start in the second half of the year. The two main reasons for this were the facts that in September 2009 it became obvious that the installations would be higher than foreseen, triggering the additional 1 % cut in the tariffs from 1 January 2010 on and the change of Government after the general elections in September, which led to an amendment of the Renewable Energy Law in July 2010 and a further substantial cut of up to16 % (in two steps) during 2010. The most often quoted justification for this additional cut is the massive price reduction of more than 30 % for photovoltaic systems in 2009.

Greece

Greece introduced a revised feed-in-tariff scheme in 2009, which foresaw that the tariffs would remain unchanged until August 2010 and are guaranteed for 20 years. However, if a Grid Connection Agreement is signed before that date, the unchanged FIT would be applied if the system is finalised within the next 18 months.

For small rooftop PV systems an additional programme was introduced in June 2009. This programme covers rooftop PV systems up to 10 kWp (both for residential users and small companies). The corresponding feed-in tariff was set at 0.55 €/kWh and is guaranteed for 25 years, as well as being adjusted annually for inflation (25 % of last year’s Consumer Price Index).

An annual degression of 5 % is foreseen for newcomers as of 2012. Despite the fact that more than 3.5 GW of PV projects are in the planning pipeline, only 36 MW were actually installed in 2009. At the moment it is unclear how the current financial crisis will affect the PV market. 

Italy

Italy moved to the second place with respect to new installations and added a capacity of about 720 MW bringing cumulative installed capacity to 1.2 GW at the end of 2009. The Italian feed-in tariffs, agreed in July 2005, led to a steep rise in applications in the second half of 2005 and the first half of 2006, but only a moderate increase in the amount of new systems capacity could be observed in 2006. After the end of the first quarter of 2006, applications with more than 1.3 GW were submitted to the “implementing body” Gestore del Sistema Elettrico, 2.6 times more than the 500 MW cap up to 2012. The actual installations in 2006 were only 12.5 MW, far less than the 50 to 80 MW predicted.

On 19 February 2007 a Decreto Interministeriale was issued, which changed the national target for cumulative installed PV systems from 2,000 MW in 2015 to 3,000 MW in 2016. This led to a steep growth in PV installations and 70.1 MW were installed in 2007 and 338 MW in 2008 and 720 MW in 2009. The new Regulations of the Conto Energia 2011 – 2013 foresee a 20 % cut in the tariff in 2011, compared to 2010, and are designed to support about 3 GW of new installations.

Spain

Spain is second regarding the total cumulative installed capacity with 3.5 GW. Most of this capacity was installed in 2008 when the country was the biggest market with close to 2.7 GW in 2008. This was more than twice the expected capacity and was due to an exceptional race to install systems before the Spanish Government introduced a cap of 500 MW on the yearly installations in the autumn of 2008.

The reason for the drastic market expansion between 2006 and 2008 was the Spanish Government’s approval of the Plan de Energías Renovables en España (PER) for 2005 – 2010 in August 2005. The objectives were to cover 12.1 % of Spain’s overall energy needs and 30.3 % of total electricity consumption with renewable energy sources by 2010.

The generous feed-in tariffs set by the Royal Decree 436/2004, dated 12 March 2004, started the development of the Spanish PV market. In 2007 the Royal Decree 661/2007 was passed with an increased cap of 1,200 MW for PV installations and triggered a run on permits to install multi-megawatt free-field solar photovoltaic electricity systems.

This development led to the revision of the Solar PV Legislation in 2008, and the new Royal Decree 1758/2008 which was approved on 26 September 2008. The new decree sets considerably lower feed-in tariffs for new systems and limits the annual market to 500 MW with the provision that two-thirds are rooftop mounted and no longer free field systems. In 2009 this change in legislation resulted in a new installed capacity of about 100 MW.

Other European Countries and Turkey

Despite high solar radiation, solar photovoltaic system installation in Portugal have only grown very slowly and reached a cumulative capacity of 100 MW at the end of 2009. The introduction of a new feed-in tariff scheme in the United Kingdom in 2010 is opening an interesting potential for growth in 2010 and after.

In March 2010, the Turkish Energy Ministry unveiled its 2010 – 2014 Strategic Energy Plan. One of Government’s priorities is to increase the ratio of renewable energy resources to 30 % of total energy generation by 2023. In line with this announcement, the Turkish Government is preparing a revision of the existing Renewable Energies Law, with the provision of higher feed-in tariffs for solar and wind energy.

Arnulf Jäger-Waldau, European Commission, DG Joint Research Centre, Institute for Energy, Renewable Energy Unit Via Enrico Fermi 2749; TP 450 I – 21027 Ispra (VA), Italia.  ec.europa.eu/