The parliament of Europe’s leading solar nation, Germany, has approved controversial reforms to its energy policy. Now all PV systems over 10kW in size will be subject to an initial 30% proportion of the energiewende (EEG) surcharge in 2015, rising to 35% in 2016 and 40% in 2017. Major industrial energy users will pay a 15% rate with the government arguing that the full rate would put them at a competitive disadvantage compared to European competitors. A late amendment was added to exempt systems under 10kW in size, and those generating more than 10MWh annually. The German PV industry association BSW-Solar warned that the exemption covered only one-fifth of the country’s predicted PV expansion, which is likely to be dominated by mid-scale systems. This could leave small- and medium-sized business exposed to the EEG surcharge while the coal industry is exempt. EU competition commissioner Joaquín Almunia has expressed concerned that consumers with solar panels will pay while large corporations will not. He is also worried that foreign electricity suppliers are not receiving equal treatment. Renewable energy groups are currently considering a legal challenge to the reforms. Renewable energy project developer, juwi group has already announced job cuts attributed to the change in policy.
The UK Department of Energy and Climate Change’s (DECC) consultation on proposals to remove the Renewable Obligation (RO), support for solar farms over 5MW is due to be finalised later this month. The proposed reform has been described as a “kick in the teeth” to the sector, with over 150 companies co-signing a letter to the UK Prime Minister, David Cameron, urging him to support Britain’s thriving solar industry.
The Italian government proposed retroactive cuts to its FiT that could see plant owners lose 10% of their revenue from the scheme. In a proposal from the Ministry of Economic Development dated 5 June, PV projects over 200kW and subscribed to the FiT will be asked to accept one of two changes. They can extend the term of their FiT payments from 20 to 24 years, effectively thinning them out, or take a straight 10% cut. The level of the cut was later revised to 8%. The new Italian proposal is part of a broader pledge to cut energy bills by 10% by 2015 but is facing legal threats from PV investors. Parliament has 60 days from the date of publication to decide on the proposals.
Spain passed solar cuts passed into law in June that will limit the profits of projects to 7.4% before tax, around 5-5.5% after tax. The cap will be periodically reviewed and could still fall further. The Royal Decree was approved on 6 June, 11 months after the levy was first mooted. In addition to the investment cap, punitive charges on self-consumption and reforms to the ways payments are calculated were also approved. In response a complaint has been lodged with the European Commission. Law firm, Holtrop SLP, which represents 1,500 renewable energy investors, delivered the complaint to the Directorate General for Energy at the European Commission on Friday. Holtrop claimed that the new system was less about energy policy and more about the government dealing with the sector’s budget deficit, thought to be around €26 billion (US$34 billion). The impact of changes in Spain and the outcome of the court cases against them could reach further into the EU.
Central & East Asia
The Japanese government ministry responsible for energy has confirmed the cancellation of feed-in tariff (FiT) approval for 144 solar power projects that were without necessary equipment accreditation or land rights by a deadline that passed in May. The 144 projects total around 290MW of capacity. A further 288 projects will be given until the end of August to get their documentation in order or face a similar fate. It was widely reported that while around 35GW of large-scale PV projects were approved for FiT accreditation in the first two years of the FiT, which began in 2012, many were yet to break ground. After a survey, the Ministry of Economy, Trade and Industry issued two deadlines – by March, projects without land rights or equipment accreditation documents in place could lose their FiT approval, following a series of hearings. Meanwhile, projects with only land rights or equipment accreditation in place have been given until the end of August to obtain the necessary certification. This applied to around 748 projects in total, of which 144 have now lost their FiTs in the wake of the first deadline expiring.
After the suggested anti-dumping duties were published in the range of US$0.11/W to US$0.81/W, two ministers have spoken against the charges. Transport minister Nitin Gadkari reportedly wrote to the ministry of commerce and industry, which set the recommended rates, and called for the charges to be scrapped and Power minister Piyush Goyal told a press conference in New Delhi that the suggested duties should not be imposed. Manufacturers, including Tata Power Solar, have claimed that the duties are necessary to ensure domestic Indian solar manufacturing is allowed to develop, while analyst Bridge to India and developer Welspun have said the charges would halt or halve India’s solar industry. The finance ministry has until 22 August to make a decision.
The Chinese government has announced changes to tax rules for distributed PV as it looks to make up ground on its 8GW target for 2014. China has several invoicing protocols, some simple, as used between retailers and customers, and a more complex system for corporate transactions. Under the new rules, invoices for electricity sold to the national grid by owners of small PV systems, can use the simpler invoicing system. In addition, VAT claims will be handled by the State Grid Company on behalf of the country’s tax authorities, reducing the number of agencies PV owners need to liaise with.
Senators for the US state of Ohio, Rob Portman and Sherrod Brown, have written to the United States Trade Representative (USTR) opposing India’s anti-dumping duties on US solar manufacturers. US thin-film manufacturer, First Solar, has a plant in Toledo, Ohio. In 2013, analysts estimated that 42% of modules used in India were thin film, with First Solar accounting for the highest market share in modules overall. The senators drew attention to the disadvantage First Solar would face if paying anti dumping duties. The Ohio senators’ letter also aims to influence India’s new finance minister, Arun Jaitley, ahead of with India due to announce its first annual budget to be announced 10 July. The deadline for reversing the anti dumping decision is on 20 August – under the circumstance the duties are not reversed, the senators ask the USTR to continue to contest the decision with the WTO.
Ontario has elected Liberal candidate Kathleen Wynne as its new premier, rejecting the Conservative’s Tim Hudak, who had pledged to scrap the province’s feed-in tariff (FiT). Hudak had been widely expected to win the contest and had pledged to remove the FiT claiming it would save C$20 billion a year in energy costs. Wynne’s surprise majority victory is an endorsement for the province’s successful FiT regime and is set to reach 2GW of installed capacity by 2015.
Southeast Asia & Oceania
Australia’s endangered Renewable Energy Target (RET) seems to have won over Australian coal tycoon and leader of the country’s centre-right Palmer United Party, Clive Palmer. Palmer said he will vote to protect the RET at a press conference held with former US vice president Al Gore in late June. Palmer said his party would block ongoing attempts by the prime minister Tony Abbott to scrap the RET. He also said Palmer United would vote to keep the Climate Change Authority (CCA) – which independently reviews policy recommendations on climate change – and support the retention of Australia’s Clean Energy Finance Corporation (CEFC), which helps to secure finance for the clean energy sector. The move represents an about-turn for Palmer, who has stakes in iron ore, nickel, oil and coal, and is the founder and chairman of Mineralogy, chairman for Queensland Nickel and China First Coal and Iron Ore and Kingsway Oil. Only recently he professed scepticism about the science of climate change.
Middle East and Africa
The West African state of Burkina Faso’s minsters of energy and economy has signed an investment agreement enabling Canadian independent power producer, Windiga Energy, to press ahead with plans for a 20MW PV plant in the west of the country. Windiga said the agreement would allow it to finalise a power purchase agreement with national utility, the National Electricity Company of Burkina (SONABEL), covering the plant’s entire electricity production for 25 years. The plant, Burkina Faso’s first, will be built in Zina, Mouhoun province, and is slated for completion in late 2015.