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    German PV drops to 15 cents max

     Germany's Network Agency has announced that feed-in tariffs for solar will be reduced by 1.8 percent each month over the next three months because the country continues to install more solar than the target corridor allows. Nonetheless, the reductions themselves are actually lower because the market is in fact cooling-off.

    At present, feed-in tariffs for newly installed arrays are reduced by 2.2 percent each month, but that figure is even lower than the 2.5 percent reduction still in effect in January. But from May to July, the rates will drop by 1.8 percent, putting even the highest PV feed-in tariff (for small rooftop arrays) at only slightly above 15 cents per kilowatt-hour, with the terror for the largest systems (up to 10 megawatts) dropping to 10.4 cents (see table below).

    Keep in mind that these rate changes do not affect systems already connected to the grid; rather, they are the rates paid over 20 years for power from systems installed in that particular month. Furthermore, feed-in tariffs are offered in Germany for all types of renewable power, not just solar – and the current retail power rate is around 27 cents, so even the highest feed-in tariff is now approaching half of the retail power rate. So much for us being able to get rid of feed-in tariffs after grid parity.
    The target corridor is for 2.5-3.5 gigawatts per year. If more is built, rates are reduced faster; if less is built, rates can actually increase. The current calculation is based on the average of 442 megawatts per month over the nine months from Q2 2012 to Q1 2013, equivalent to around 5.31 gigawatts – 1.81 gigawatts above the target corridor. So in addition to the 1.0 percent automatic monthly reduction that would take effect within the target corridor, an additional 0.8 percent will be tacked on.
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