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German renewable heating support scheme cut

An immediate ban on further support payments under the German incentive scheme for solar heating, biomass and heat pump installations has been ordered by the German Ministry for Environmental Affairs.

The European Solar Thermal Industry Federation (ESTIF) criticises this decision which “hits the solar thermal industry without warning and puts the whole renewable heating sector in danger.”

The measure is based on a budget freeze put in place by the German Federal Parliament.

ESTIF says most of the manufacturers concerned have already received order cancellations; they will have to restructure their business lines, scale down production and consider a reduction in workforce. Many smaller companies that have specialised and now depend on demand for single components may even be forced to file for bankruptcy, the Federation predicts.

“The measure will also lead to a structural weakness in the solar thermal market,” says ESTIF’s President Oliver Drücke, “as customer demand is likely to fall at short notice but needs, as experience demonstrates, years to rebuild. With Germany representing 38% of the European market, the decision’s ramifications will reach well beyond Germany.”

The German industry

The German solar industry association (BSW-Solar) also strongly objects the unprecedented decision, arguing that under the present support scheme (the so-called “Marktanreizprogramm”) each Euro invested in solar thermal triggered €8 of subsequent investments.

With the government support scheme being a key driver of the private customer demand for solar thermal installations, the future development of technology at more competitive prices is made difficult, if not impossible.

According to Carsten Körnig, CEO of the German solar industry association, it is therefore “more than uncertain whether the ambitious goal of an 18% share of renewable energy in the overall energy mix in Germany can be reached by 2020 without the full contribution of renewable heating and cooling.”

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