Here in the UK we’ve managed to install a total more than 100,000 individual solar installations in just 19 months. However, with drastic feed-in tariff cuts on the horizon and a Government that doesn’t seem to understand, is the UK solar industry destined to fail?

To find out more about where the market is heading, I spoke with Jan Jacob Boom Wichers, Managing Director of REC about his experience in the German solar industry – which remains the most successful in the world – and how this related to recent events in the UK.

We all know that Germany has the most successful solar PV market in the world, but how big it estimated to be at present?

The predicted size for 2011 of German market lies between 5 – 6GW according to external analysts (though this is an optimistic projection).

What are the current feed-in tariff rates in Germany?

The German feed-in tariffs (FiT) vary according to installation capacity and whether modules are roof- or ground-mounted. There is a unique FiT for ground-mounted installations, independent of size, set at €0.2111/kWh. The FiT for a roof-mounted up to 30kW installation is currently set at €0.2873; from 30 to 100kW at €0.2733; from 100kW to 1MW at €0.2586; and above 1MW at €0.2156.

So, by my calculation, the German rates are still higher than those proposed for the UK – and they also support systems above 1MW. How are these rates decided?

Changes to the FiT are set in a legal framework that was enacted in June 2011. By law, a standard reduction rate of 9% is applied to the FiT if total installed capacity over a 12 month period (ending in October) is between 2,500 and 3,500MW. Should the installed capacity exceed the 3.5GW upper limit, the standard reduction rate will be increased by three percentage points per additional Gigawatt.

In 2012, given the recorded total installed capacity of 5.2 GW in 2011, the FiT will be reduced by 15 percent for all installation sizes, ground- or roof-mounted. The maximum FiT decrease allowed in one year is 24 percent. If the installed capacity does not reach 2.5GW, the standard reduction rate of 9 percent is decreased by 2.5 percentage points per tranche of 500MW under the lower limit. Installed capacity and FiT rates are announced annually.

So, it seems that the German FiT rates are decided in quite a different way to those in the UK – and remain favourable. How do you think the UK’s model affects market growth?

The ideas behind the German and UK systems are similar, yet there are of course differences in the manner the systems are rolled out. For example, the UK scheme currently supports the installation of photovoltaic plants up to 50kW that are economically viable, though at first it supported plants producing up to 5MW. Germany does not have this limitation.

Generally, the German scheme is more established and stable. The UK policies are meant to promote developments in the residential sector over large scale installations. The German FiT system has a long-term vision and stability.

Unplanned and too frequent changes destroy confidence in the market making it difficult for installers to grow their business in a sustainable way. The recently proposed FiT rates are much lower than those in Germany even after the schedule 15 percent rate decrease (except up to 4kW). While at REC we believe that in the longer run subsidies will not be needed, the 50 percent cut across the board is too much, too soon for such a young industry to grow in a safe and sustainable way.

To find out how the Germany solar industry works with Government in order to prevent the situation we now have in the UK as well as learning about how the world’s largest solar market has survived years of cuts, subscribe to the next FREE edition of Solar Business Focus UK.