Solar energy cos: Gov't plan to cut PV prices is lethal

Prices for PV panels have plummeted resulting in unexpected profits for solar power companies.

Israel's solar energy producers warn that the government initiative to cut the guaranteed prices for mid-sized solar energy facilities will kill the industry. "People will avoid private power production in Israel if the rates the entire industry relied on are changed, warned Association of Renewable Energy of Israel CEO Eitan Parnass in a letter to Public Utilities Authority (Electricity) acting chairwoman Orit Farkash-Hacohen.

The Public Utilities Authority plenum is due to discuss today a proposal for a hearing to cut the incentives price for mid-sized photovoltaic power plants because of the sharp drop in prices for PV panels, which has resulted in unexpected profits for solar power companies. The electricity rates were set two years ago.

The companies counter that the Public Utilities Authority is not taking into account their expenses over the past two years when almost no power production licenses were issued due to bureaucratic delays.

Prices for PV solar panels have fallen due to a severe recession in the industry worldwide and a huge accumulated inventory of panels at Chinese manufacturers. Electricity market sources say that several Western countries that are prominent in the solar energy industry, such as Germany, Italy, and Spain, have reduced their subsidies and tariffs to solar energy producers, because of the global crisis.

Sources inform ''Globes'' that the Public Utilities Authority has an opinion by Deputy Attorney General Avi Licht, who says that a tariff reduction is legally permissible, but would require compensating power producers for expenses for lost business caused by the tariff reduction. The power producers would not be compensated for lost expected income based on the original tariff.

Only companies that have the 188 licenses awarded to build mid-sized PV facilities will have the right to receive compensation. The applicants for the 600 licenses which have not yet been awarded will probably have no right to sue for compensation.

Published by Globes [online], Israel business news - - on October 24, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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