France Plans Cut in Solar Feed-in Tariff
France likely to cut Solar Feed-in Tariff by 12%
Beginning September 1, France will likely cut its solar feed-in tariff by 12%. The Ministry of Sustainable Development has a strong desire to slow demand and spending. A cutback in the solar feed-in tariff was expected, but the timing is earlier than had been predicted.
The solar feed-in tariff in France has been one of the best, worldwide, at 31-58 Euro cents/ kilowatt hour, determined by the type of installation. Aaron Chew, of Hapoalim Securities, predicts that the solar feed-in tariff cut will reduce demand, and probably send solar energy companies scrambling to create new price schedules.
France primarily uses nuclear power, and while grid parity is a goal of the solar feed-in tariff, that ideal is a long way off. France’s solar feed-in tariff has resulted in the installation of over 350 megawatts of solar power this year.
Small residential installations in France are not likely to be impacted by the solar feed-in tariff cut, but larger building-integrated photovoltaic panel systems (BIPV) could be hit hard.
Demand for solar power is likely to drop if the solar feed-in tariff is reduced, leaving a glut on the market. France needs to avoid the lesson learned by Spain in 2008, when its solar feed-in tariff was suddenly cut, creating chaos in the country’s alternative energy market.