The German Solar Energy Market is biggest in the world and has installed the largest number of solar panels for the last few years. 2012 promises to be no different with Germany again set to the biggest solar market for solar panel manufacturers though Italy would give good competition. The German Solar Subsidy program has been the best in the world unlike the start and stop feed in tariff programs of Spain,Czech,UK,Australia and other places. A stable step in cut of feed in tariffs has helped solar energy prices coming down by more than 50% in the last few years though demand has only increased.
The influx of cheap solar panels from China has let the December 2012 explode to almost 2-3 GW according to the German solar association BSW. The high rates of return of over 10% due to super cheap Chinese solar panels at 80-90c/watt has been the major reason for the explosion in demand which could be the biggest month in Germany ever. While German Solar Market has remained robust as ever,the German solar panel producers like Solon, Sunways have been vanquished with a number of major solar companies failing and getting acquired. The Asian solar companies have been the major beneficiaries of this demand growth in Germany and Europe.
The massive rise in demand will imply that according to the EEG ,t here will be a 15% cut in July 2012 after a 15% cut in January 2011. This would bring the solar FIT prices quite low and provide a restraint to the galloping German solar energy installations which is reaching more than 25 GW .
**Abhishek Shah is a computer engineer (NIT Warangal) and MBA (IIM Calcutta) by education with interests in technology, renewable energy and finance. He also writes about globalization, poverty, income inequality, corruption, and macroeconomics. By day, Abhishek works as an analyst with a green and technology focused investment fund.