France Cuts Solar PV Feed In Tariffs by 12 Percent

Feed-in tariffs for industrial installations in France decreased by 12 percent beginning on September 1st. This move was done to prevent overheating in the sector.

According to the French Minister for Ecology, Energy, Sustainable Development and Town, Mr. Jean-Louis Borloo, the objective of having 5,400 MW of solar PV capacity may be reached in 2013 instead of 2020.

ERDF (electricity distributor to 95% of France) estimates that there are up to 68,000 projects totaling a capacity of 3,000 MW that are already planned. Agricultural and financial installations account for 33 percent of the demand and total 80 percent of the added capacity.

This is why Mr. Borloo and his ministry decided to cut the feed-in tariffs for these applications.

According to the French Daily Le Figaro, the solar PV capacity at the end of 2008 was of 81 MW. By the end of this year it is due to reach 850 MW.

This explosion of capacity has a price. Indeed, the risk of overheating is important as financially the feed-in tarrfis may well reflect themselves in increasing prices for households and companies.

ADEME (the French Environment and Energy Management Agency) previously estimated that electricity prices would increase by eight euros by 2020. However, with the rush to install solar PV, prices may instead increase by 60 euros as early as 2012.

The latter estimates don’t take into account the drop in prices of solar panels (minus 40 percent in a year).

The Solar PV industry already employs 15,000 people in France. However, the country is way behind Germany, Spain and even Belgium in terms of per capita installed capacity. (120 W in Germany, 76 in Spain, 33 in Belgium and only 4.5 in France)

With offshore wind, it seems France is moving forward fast to try to catch up with its German neighbour.

It should be noted that the rise of solar photovoltaic shouldn’t make us forget about its oft overlooked cousin: solar thermal. With less than 50,000 installations per year, the technology isn’t used as much as it should be.