Germany cancelled the proposal for subsidy reduction

June 21, 2011

Germany, the largest PV application market in the world, planed to reduce the extra subsidy for PV electricity price which is a Damoclean sword over domestic PV corporations. Unexpectedly, the provision of reducing subsidy has been removed from a renewable energy bill which has gone through by Germany’s Bundestag in July 6th. Apparently, German government wants to maintain the original amendment mechanism of electricity price. Thereby the electricity price subsidy for PV power stations will depend on annual installation quantity as original plan; the lowest reduction can reach 24%. Besides, all the German nuclear power station will close down in 2022. Meng Xiangan, the Deputy Chairman of China Renewable Energy Institute, expressed that Europe tend to support PV industry development relied on total quantity control rather than subsidy reduction. The general trend of PV industry development won’t change, PV installation target of Europe and United State won’t reduce. It is normal that module’s price is going down and the subsidy is reducing every year. We don’t need to feel too pessimistic about it. However, the stock of PV downstream industry still has risk.