Government of France announced that it is cutting its solar feed-in tariff for rooftop systems from 55 euro cents to 42 euro cents, a 24% reduction in its solar-incentive system. According to analysts, the government did this to stabilize the market, as at 55 euro cents, it was getting 3,000 applications a day. And as a still new market (when it comes to solar energy and when compared to let's say Germany), there's still plenty of room for growth in France.
Moreover, some players like First Solar which build ground-based solar parks won't be affected with the change in subsidies. Overall, the French market may grow to the level of the low hundreds of megawatts this year, according to Navigant projections, and will be somewhere between the bottom half of the global top ten in solar capacity.
In the other European news, German government is planning to chop feed-in tariffs as early as April, much more deeply and sooner than the market expected, according to Reuters. We're talking about a one-off cut of 16-17 percent on top of the 10 percent already set out in the German Renewable Act.
UniCredit's analyst Michael Tappeiner disagrees with the decision saying that the subsidy cuts would "initially reduce investment returns in the ground-mounted solar park segment to unattractive levels."
Although all solar companies will suffer from the tarrif cut, CLSA analyst Charles Yonts believes that Chinese companies will emerge as winners due to their significant advantage in terms of pricing…
We'll certainly be watching the European solar market, so stay tuned.
