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Germany: A sharp decline in solar energy demand

, February 3, 2014, 0 Comments

Germany solar energy demand-MarketExpressGermany has undoubtedly been the biggest solar success story in the world, thanks to its far sighted EEG law. However China and Japan have far eclipsed Germany in the last one year, as German market has saturated itself with solar energy. Germany has a massive 35 GW of solar power installed now, which is almost 20% of the entire solar capacity of the country. All of this power is given higher electricity rates due to the FIT law.

The government has been trying to check the rapid growth in solar energy, but has failed despite sharply dropping the subsidy rates for solar energy. It was only in 2013 that Germany showed a sharp decline in solar energy demand, which was in line with what the government had wanted. Before 2013, Germany used to install 50% of the global solar installations.

The country now wants to decrease the subsidy and support to solar power, even more as solar demand fell to 3.5 GW in 2013 which is less than half in 2012. The industry association and solar companies are as usual protesting the proposed changes in EEG law, which would further curtail the growth in the solar energy.

However, the country has been pretty much saturated with solar power and 5-7 GW of installations per year is no longer sustainable. The solar companies should look outside for growth. Most of the German solar companies have gone bankrupt unable to keep up with the cheaper Asian competitors.

The 2 year downturn of 2011 and 2012 has almost completely finished off German solar manufacturing with Bosch, Siemens, Q-Cells, Solwarworld posting billions of euros in losses. Most of them have exited or been sold for pennies to the dollars.

Even solar installers such as Conergy and Juwi which used to be the biggest solar installers have disappeared from the scene. The German solar boom will never return with the locus of solar energy permanently shifting to Asia. India and China will install hundreds of gigawatts of power in the coming couple of decades. With fossil fuel prices high and global warming a major concern, it is only a matter of time before solar power becomes the main energy source. Solar power has already exceeded the growth in other fuel sources in many parts of the world. In developer economies, solar power is the only major engine of growth with even wind power plateauing these days.