In 2011, the German Solar Market saw installations set a new record with 7.5 GW, up from 7.4 GW in 2010.
The German government have long used tariff subsidies to boost the solar market, but only supporting an annual growth of 2.5-3.5 GW. Consequently, cuts in tariff subsidies have been made to reduce the growth. Yet, the growth sets new records fueled by prices collapsing, making solar installations more affordable. Now, growth continues with less need of subsidies, causing challenges concerning the grid infrastructure.
German policy makers
The German government has set a target of 66 GW of installed solar PV capacity by 2030. This target is to be reached with an annual increase of 2.5–3.5 GW. The total is now about 20.6 GW.
Cut in tariff subsidies
The boom in the solar market warrants a steeper cut in tariff subsidies in order to cut expenses on German tax payers in a booming solar market. Policy makers want to reduce the growth of solar power, cutting the tariff subsidies in order to get higher costs for consumers. Already Germany has been cutting the favorable tariffs in order to force the industry to lower its costs in a faster rate. Now, a new cut is placed around 20-25 %.
In December 2011, the amount of installation was about 3 GW. Currently, solar is contributing with an overall power output of about 3 %. In November, the financial minister proposed an annual growth of only 1,000 MW (1 GW). In Spain, a similar moved saw the country fall from rank 1 in 2008 to rank 8 in 2011.
The government have discussed and already made cuts in the tariff subsidies. However, this has not slowed down the solar market, still reaching new record 7.5 GW. A more aggressive cut with 20-25 % is not excepted to have great impact on the solar market in 2012. Instead, falling prices on PV installations have made it more affordable for consumers to invest in solar regardless of subsidies.