Greece is offering some of the most generous solar feed-in tariffs, but many analysts have been cautious and predict only a moderate growth in this market in the next year and half.
The Greek government just launched a new feed-in tariff for rooftop installations of photovoltaic solar energy systems with up to 10-kilowatt in generation capacity. It would complement the tariffs for larger, roof- or ground-mounted systems the government announced in January this year.
At 55 euro cents per kilowatt hour, the latest tariff is a lucrative offering. Spain is mandating about 34 euro cents per kilowatt hour for rooftop systems. Germany has set its at roughly 43 euro cents per kilowatt hour for those under a 30-kilowatt capacity.
The new rooftop feed-in tariff in Greece would remain through 2010. There is no cap that would limit the amount of new solar power to bring online under this new program.
Feed-in tariffs are government-set solar electricity rates, and utilities in countries with feed-in tariffs are required to buy solar power via long-term contracts. Home and business owners could make a good profit by installing solar on their properties and selling the resulting electricity to utilities.
A feed-in tariff program, understandably, could significantly boost a country's solar power generation. Germany, which is one of the largest solar markets worldwide, is often held up as a success story.
But that's not what some analysts are expecting in Greece.
"It has excellent solar conditions. But bureaucracy is so high, it's incredible," said Daniela Schreiber, head of strategic operations at Germany-based EuPD Research, during a solar conference in San Francisco last week.
Greece first launched a feed-in tariff program in 2006, but it hasn't been able to run it smoothly. The government had about 3 gigawatts worth of applications waiting to be processed when it announced a new version of the program in January this year.
Solar energy system owners need to apply for government approval before they could start getting paid by utilities.
Under the new program, systems that are greater than 10 kilowatts but less than 10 megawatts would have tariffs range from 40 to 50 euro cents per kilowatt hour. The government is offering to provide grants that would offset 40 percent of project costs more than €100,000.
For 2009, the country could add 35 to 40 megawatts of new capacity, up from about 11 megawatts in 2008, said Steve O'Rourke, research analyst for Deutsch Bank. For 2010, O'Rourke is projecting more than 100 megawatts.
Those figures are tiny compared with 1,530 megawatts of new solar installed in Germany and 2,500 megawatts in Spain in 2008, according to EuPD Research.
Spain capped its overall new installations at 500 megawatts for 2009, a policy that dramatically shrunk the once-hot market (see Spain: The Solar Frontier No More and Spain Kicks Off New Solar Feed-In Tariffs).
Germany, on the other hand, could still take on gigawatts of new solar energy systems in 2009. Analysts say German's feed-in tariff program is better crafted than Spain's primarily because it doesn't have a cap, which could severely restrict the market growth (see U.S. Solar Market: So Promising, Except 2009).
Gainesville, a city in Florida that was proud to point out that it was the first U.S. city to launch a feed-in tariff program, also set a 4-megawatt-per-year cap. It launched the program in the spring of this year, and has already received enough applications to fulfill the cap for 2009 and 2010.
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