Deutsche Bank Climate Change Advisors (Frankfurt, Germany) has issued a report which identifies German feed-in tariffs as the “best in class” renewable energy policy, and states that the program will allow PV to grow to 7% of the nation’s electricity supply by 2020.
“The German Feed-in Tariff for PV: Managing Volume Success with Price Response” cites an evolving policy structure and the ability to manage demand through price as critical to the success of the German program.
“Germany’s policy continues to drive renewable energy at scale, supported by binding, ambitious targets, a mature renewable energy sector, and an integrated climate and energy policy framework that exhibits longevity and supports investor security,” states Deutsche Bank in the report.
“We believe that Germany’s integrated climate and energy policy has been and will remain a key contributor to making solar energy competitive with on-peak fossil-fuel-fired electricity by 2014.”
German approach includes lack of caps
The report notes that solar and other renewables will play a more important role due to the German government’s planned phase-out of nuclear power.
Deutsche Bank also notes that the lack of a cap to the program has allowed Germany to serve as a demand “backstop” for the global solar market even as other markets have contracted. When faced with greater than anticipated installations, other large European PV markets placed limitations on PV growth.
Germany has shown considerable restraint in managing feed-in tariff digressions, and has also not imposed dramatic program cuts as Spain, the United Kingdom and other nations have done. These severe cuts have been disastrous for domestic PV industries.
Ernst & Young report confirms benefits of FITS
The Deutsche Bank report is the latest to confirm that European-style FITs are the most successful policy mechanism for renewable energy development in the world.
Ernst & Young’s 2011 “Renewable Energy Country Attractiveness Indices”, published in February 2011, also noted that fixed-rate FITs are less costly than competitive solicitations, due to a lower risk profile and greater certainty.
The report also notes that fixed-rate FITs are easier to understand by both investors and finance providers, and tend to attract broader market participation.
2011-08-22 | Courtesy:Deutsche Bank AG, Ernst & Young | solarserver.com © Heindl Server GmbH
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