France plans to cut subsidies for photovoltaic projects already connected to the grid to support new renewable power generation projects
France is to reduce subsidies for solar plants that come on stream between 2006 and 2010 in an attempt to shift support to new renewable power generation projects.
Under a draft law passed by the country's lower house of parliament, the subsidy would be reduced from 600 euros /MWh ($710 /MWh) to an undisclosed amount for 3.4GW of solar units as part of a 20-year government-backed procurement guarantee contract.
The amendment covers only the remaining period of the agreement, which can be renegotiated if the subsidy reduction affects output.Solar plants generating less than 2.5MW will be excluded from the subsidy change.
France's oldest solar plants generate only 1% of the country's electricity and 5% of its renewable energy output, but they receive about a third of all public subsidies for renewable power generators, about €2 billion ($2.4 billion) a year.
The government says this is because their subsidies have never been reviewed, even though their production costs fell more than fourfold between 2006 and 2010.
Paris plans to allocate more than €110bn to new renewable energy projects over the next 20 years and will launch tenders over the next five years to help finance more than 10MW of solar capacity.
The Renewable Energy Association asked the upper house of Parliament to vote against the draft law.Enerplan, a domestic solar industry body, said the proposal was based on a miscalculation of the cost of solar production.
The proposal could also encourage investors and lenders to introduce tougher financing conditions for new projects, which would slow the pace of renewable energy growth in France, according to the Renewable energy association Solidarite Renouvelables.
Last year, France's installed renewable energy capacity grew at its slowest rate since 2016, with new additions still well below the country's multi-year energy targets.At the end of 2019, solar power generation increased to 9.44GW from 8.53GW a year earlier, a slightly higher rate for the year but lower than the 2012-2018 average of 1.01GW.
The latest increase in French pv capacity is expected to reach 1GW/2 by 2023.
