Plans to skim off solar PV windfall profits could “poison investment climate” – industry

Plans by the German government to "retroactively or disproportionately" skim off windfall revenues of the photovoltaic (PV) industry could lead to a market collapse, said the German Solar Industry Association (BSW). Investments in the PV industry could falter following the economy ministry’s proposal to fund the so-called "power price break" by skimming off windfall profits from electricity producers, which could be retroactively applied up to March 2022, BSW says. Additionally, it warns retroactive market interventions as proposed could be unconstitutional, and are not within the framework set in EU regulation, following an audit by law firm RAUE on behalf of BSW. “Such interventions would permanently poison the investment climate for market-driven solar power plants,” BSW head Carsten Körnig said. “They threaten to set back the market introduction of photovoltaics by many years.” Due to a sharp rise in capital, lease and component costs, the solar industry currently requires significantly more capital, Körnig said.

The German government and the EU have planned to levy a windfall tax on electricity producers as their profit margins have multiplied in the wake of rising energy prices, while many consumers face severe difficulties in paying their energy bills. In Germany, profits would be used to lower power prices for households and small businesses. RAUE lawyer Anna von Bremen said that “Interventions must be proportionate and non-discriminatory and must not jeopardise investment signals. However, the reactions to the leaked presentation already prove that investors will pull out.” Germany aims to increase the share of renewables in power consumption to 80 percent by 2030. In the first half of 2022, the share was just under 50 percent.