Germany is the dominant player in today’s solar PV market with more than 50% of the installed capacity worldwide.
Why? It is not because of the great sunshine… The federal government was early out of the gate with a favourable feed-in-tariff law in 2000. Several technological innovations have been developed in (Eastern) Germany and regional development supported the establishment of manufacturing plants for all parts of the solar PV value chain.
Ontario has granted feed-in tariffs between 80 and 53 cents that are significantly higher than the old German tariffs that now will be reduced by 15% by July 1. A large number of Solar-PV-FIT contracts have been awarded, creating a customer base in Ontario.
It will be interesting to watch if the German market continues to grow. If yes, other tariffs need to reduced as the technology allows for lower rates to keep solar-PV a profitable investment.
However the higher rates in Ontario seem appropriate as a solar roof-top installation in Germany costs around 40-50% less than in Ontario.
Now the questions is: Do the tariffs reflect the higher costs of the installation in Canada or do the higher cost of installation, created by the higher feed-in-tariffs, provide extra-profit for earlier leaders in the development of solar-PV-installations in Ontario. I tend to believe the latter is the case.
Source for chart: European PV Industry Association (EPIA)
Ingo studied business administration and economics at Kiel University where he received a PhD in economic policy and also earned an MBA from the University of Southern California in Los Angeles, USA. Visit www.koenigconsultants.ca