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About 3 GW out of last year's 7.5 GW total was installed in December alone. This is yet another last-best-chance rate-cut bubble, as in the current system, the Januarty 2012 rate degression was set in the autumn based on installations in the 12 months up till then, and set they were at 15%. There will be another rate cut in July, and only 225 MW have to be installed until April for that cut to be the maximum 15%, too.

So far panel prices kept dropping at a similar insane rate:

If the industry survives 2012, feed-in tariff opponents will have to bury a few favourite arguments...

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri Jan 13th, 2012 at 03:10:43 PM EST
[ Parent ]
,,, still insane. That graph needs redrawing with the x axis set at zero, and the feedin tarrif for wind added in for comparison. Actually, you know what, I am now annoyed at the way people tout this insanity as a success. Diary by tonight.
by Thomas on Sat Jan 14th, 2012 at 12:28:17 AM EST
[ Parent ]
Good, another instalment in the how to lie with charts series!

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sat Jan 14th, 2012 at 03:31:08 AM EST
[ Parent ]
More like another instalment in the how to give wrong answers to the wrong questions series.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Jan 14th, 2012 at 05:23:07 AM EST
[ Parent ]
Or another instalment of more heat than light: religious debates edition in the comments.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sat Jan 14th, 2012 at 05:57:43 AM EST
[ Parent ]
More like in the diary.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Jan 14th, 2012 at 06:35:26 AM EST
[ Parent ]
The one for wind? Why?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Jan 14th, 2012 at 04:28:49 AM EST
[ Parent ]
Because it puts the tarrif for solar in perspective. The lines for wholesale power prices with and without taxes would also be useful. Speaking of. Ive been trying to find numbers for actual output from german solar on a more fine grained basis than "Per year". Google is being remarkably unhelpful. So are the free resources of the IEA, the german economic ministry and eurostat.  A breakdown of how much of the german feedin tarrif is paid to each renewable sector is also eluding me. Am I just being a complete failure at googling or is this stuff really all behind paywalls?
by Thomas on Sat Jan 14th, 2012 at 04:44:14 AM EST
[ Parent ]
Because it puts the tarrif for solar in perspective.

On a graph not showing the solar feed-in tariff but showing the solar module price index?... In addition, to repeat this to you yet again, there is not much perspective to be given by comparing feed-in tariffs for different technologies. All aim to give new technologies the chance to bring down prices by technological development and the realisation economies of scale on a stable sub-market. And you can cry insane all you want, but show me another technology that brought down prices 58% in five and a half years, with feed-in laws or without.

In the meantime, I prepared a first graph showing a comparison that may make sense, one between the feed-in rate and the module price index, this time showing the Y axis starting at zero:

However, I think a log graph makes more sense than one with the Y axis starting at zero:



*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sat Jan 14th, 2012 at 05:22:16 AM EST
[ Parent ]
Ooops, I forgot to edit the diagram titles, will do so in case I re-post.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Jan 14th, 2012 at 05:31:40 AM EST
[ Parent ]
The lines for wholesale power prices with and without taxes would also be useful.

This one is without taxes. The relevant tax is VAT, which is 19% since January 2007, and was 16% before.

Regarding intra-year solar output and a breakup of EEG costs, I'll look for those later today.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sat Jan 14th, 2012 at 05:29:32 AM EST
[ Parent ]
by Katrin on Sat Jan 14th, 2012 at 06:31:17 AM EST
[ Parent ]
Thank you very much. Exactly what I was looking for.
by Thomas on Sat Jan 14th, 2012 at 07:12:36 AM EST
[ Parent ]
Some comments on those sources:

  • Leipziger Strombörse: you can display or download hourly production data there, unfortunately, only for each chosen day separately.
  • BDEV: the interesting part is in the document titled "Energie-Info: Erneuerbare Energien und das EEG: Zahlen, Fakten, Grafiken (2011)" linked on the right. There is a monthly production graph for PV on page 12 (and for wind on the previous page). You'll find a bar graph showing the time evolution until 2010 of both production and feed-in payouts on page 37 (and the same with an estimate for 2011 and a projection until 2016 on page 65). The evolution of the difference between feed-in payouts and market price, as well as the annual average market price, is shown on page 32 (with the warning that the 'market price' of fed-in electricity is calculated on the basis of time averages, thus the merit order effect is not included).
  • BSW-Solar: you'll find a price - feed-in rate degression comparison similar to mine on page 4. The structure of the electricity price for non-industry consumers is shown on page 6, with a prediction for price increase until 2016 and the factors in it.

Some additional sources:
  • EEG-KWK-G: this page links pdfs with the annual feed-in payout statistics (third tables, "EEG-Vergütungen in Euro").
  • SFV (click "Alle Jahre"): this is an association that tracks the production of (at present) thousands of single installations. They have tables for average monthly production per generating capacity (with two methods of averaging) back to 1991.

Finally, on what the feed-in law is about. From the feed-in law itself. Last year I quoted longer passages, here I reproduce the part relevant to the PV price reductions achieved (with my emphasis from back then kept):

...die Technologien zur Erzeugung von Strom aus Erneuerbaren Energien [müssen] laufend fortentwickelt werden. Dies trifft insbesondere für die Fotovoltaik zu. Um diesen Prozess zu fördern, werden die Vergütungssätze dieses Gesetzes nach Energieträgern und teilweise auch technologiespezifisch differenziert sowie degressiv ausgestaltet. Dadurch wird ein Anreiz zu Innovation und Effizienz gesetzt. Darüber hinaus ist die reale Preisentwicklung zu berücksichtigen. Ziel ist es, die Techniken zur Erzeugung von Strom aus Erneuerbaren Energien möglichst schnell zur vollständigen preislichen Konkurrenzfähigkeit gegenüber den konventionellen Energien zu verhelfen......the technologies to generate electricity from renewable energies have to be developed further continuously. This is true above all for photovoltaics. To foster this process, the feed-in rates of this law are shaped in a way that it differentiates according to energy source and partly also according to technology, and is degressive. That way, the incentive for innovation and efficiency is set. Furthermore, the real price development is to be considered. The goal is to help technologies that generate electricity from renewable energies achieve complete price competitiveness vs. conventional energies as quickly as possible...


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Jan 14th, 2012 at 04:40:03 PM EST
[ Parent ]
A few words about rate-change bubbles (the first of which I covered in Turbulent times for solar power). The key factors are the following:
  1. Whenever politicians begin to speak about strong rate cuts, they are creating an uncertain investment environment, and thus those who consider an installation will bring their investment forward.
  2. If a strong rate cut is half a year or a year in the future, the industry will try everything to compensate for it by cutting prices (especially if, as now on the German PV market, there is strong price competition from developing-world producers). If (if!) it manages to match the rate cut, just before the rate cut, profit margins will be phenomenal, thus new investors will rush on the market.

The end result will be that, one one hand, the market will heat up rather than cool down as intended; on the other hand, development of the technology will be accelerated (and the lowered prices will then bring a spread of the technology in the rest of the world, too).

Now then, if the intent had been to just bring about a significant rate reduction, this could have been achieved without bubbles with modest cuts at a higher frequency, say every quarter or month. But, what was the rationale for strong cuts?

  • Was it to limit feed-in payouts? Feed-in payouts don't come from the government budget and thus tax income, but from distributors and thus indirectly from customers (where large industrial customers enjoy an exception). Thus, a demand for feed-in payout limitation would have to come from customers – but all polls show that, quite the contrary, even after 12 years of an established industry campaign that blamed all their price increases on the feed-in law, people would be willing to pay more.
  • Was it to restore equal opportunities for different renewables in getting capital? This is again fishy, because it ignores the different sources of investment different technologies can attract. A homeowner or a small company may choose to install PV panels on its roof, but is unlikely to play a role in the financing of an off-shore wind farm, a small hydroelectric power station, or a geothermal plant (not to mention solar power abroad like Desertec).
  • Or was it a (failed) attempt to stifle competition for established industries?

Of course, even if power customers haven't turned against a feed-in-law-supported mode of power generation, there is a rationale in synchronising rate reductions with price reductions: forcing the industry to not slag off with development that is to achieve further price cuts. Single large cuts, however, can stop development by choking the market. on the German PV market, however, for now we have accelerated development instead.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Jan 15th, 2012 at 06:39:18 AM EST
[ Parent ]
Very good summary argument, DoDo. I'm not sure that one could expect prices to change monthly, for i don't believe costs drop at that speed.

In fact, it would be more appropriate to see what margins are for the producers. Some of the price drops are due to technical/manufacturing progress, some to economies of scale, and some are simply strategic, expecting to capture market share.

These third kind of price drops may be actually dangerous for the industry, because it affects the financial headroom of the company, and increased market volatility. Neither of those conditions sends proper signals to the industry.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Mon Jan 16th, 2012 at 03:39:13 AM EST
[ Parent ]
Incidentally, what I wrote is now reportedly the industry proposal towards industry minister (and FDP party secretary) Philipp Rösler:

WDH/'FTD': Solarbranche legt eigenen Kürzungsvorschlag vor | FTD.de WDH /'FTD': solar industry presents own reduction proposal | FTD.de
Das neue Modell der stetigen Kürzung soll den Zubau reduzieren. Bisher wird die Einspeisevergütung immer zum 1. Juli und zum 1. Januar gekürzt. Davor kommt es regelmäßig zu enormen Schlussverkaufseffekten, die in Zukunft vermieden werden sollen. Noch unklar ist, ob die Anpassung in Zukunft vierteljährlich oder monatlich erfolgen soll. Aus Sicht der Branche ließe sich so das Marktgeschehen verstetigen.The new model of continuous reduction is designed to reduce annual new installations. Until now, the feed-in tariff is reduced on 1 July and 1 January. Prior to [these reductions] usually enormous clearance sale effects occur, which are to be avoided in the future. It is still unclear whether in future the adjustment should be made quarterly or monthly. From the perspective of the industry, this would be the weay to stabilize the market.


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu Jan 19th, 2012 at 09:26:42 AM EST
[ Parent ]

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