Intersolar 2008: Reformed Legal Framework Proves Germany's Commitment to Solar

BERLIN, June 12 /PRNewswire/ -- Intersolar 2008 is beginning with encouraging news for solar investors. Germany's favorable legal framework, that has made the industry successful, is secure. Shortly before the world's largest trade fair for solar technology, running from June 12-14th in Munich, Germany, the country's parliament reaffirmed its commitment to solar energy by passing a reformed Renewable Energy Sources Act (known as the EEG).

Germany has quickly become the world's leading solar market. The numbers tell the story: Its 3.8 GWp (Gigawatt peak) of installed photovoltaic (PV) capacity makes up nearly one half of the global solar energy market. This capacity is contributing to significant revenues for PV companies located in Germany. In 2007 PV industry revenue hit EUR5.5 billion. Experts say that the market is far from exhausted. Rather, further market growth of 15-25% is expected.

The industry's success in Germany is thanks to many factors: The country's large pool of skilled workers means that products can quickly go from the drawing board to reality. Product failure rates are also very low. A dense research network allows ideas to be worked through and implemented into new products quickly and efficiently. Public authorities in Germany are also supportive of PV and process building applications in a timely fashion.

The EEG is, however, one of Germany's major advantages. It mandates that owners of PV equipment, such as solar systems, be paid a "feed-in tariff" for solar energy that is sold into the public grid. The tariff, that is good for 20 years, makes it profitable for homeowners, businesses, and other institutions to own solar systems. This, in turn, creates a domestic market, making Germany an attractive location both to produce and sell PV modules and components.

Under the original legislation, the tariff fell by five percent every year, in order to encourage cost reductions and efficiencies. The solar industry is working toward "grid parity," the point at which electricity from solar energy costs the same as that from conventional sources.

The parliament has now agreed to set the annual tariff reduction at between eight and ten percent in 2009 and 2010 and then nine percent annually following 2011. Solar industry representatives announced satisfaction at the decision.

"This vote keeps Germany a top location for PV investment, while giving further impulse to the race for grid parity," noted Nikolai Dobrott, Senior Advisor and head of the Renewable Energies team at Invest in Germany.

Invest in Germany is the inward investment promotion agency of the Federal Republic of Germany. It provides investors with comprehensive support from site selection to the implementation of investment decisions.

  Eva Henkel
  T +4930200099-173
  F +4930200099-111
  henkel@invest-in-germany.com

CONTACT: Eva Henkel, T +4930200099-173, F +4930200099-111, henkel@invest-in-germany.com

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