France to give ‘made in EU’ premium to solar plants

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French solar power producers will receive a 10% premium on selling green power from April, as long as the electricity is produced using components manufactured in the European Union, France's environment ministry said on Thursday (16 February).

Environment minister Nathalie Kosciusko-Morizet had already announced putting in place a premium on Tuesday when she visited the headquarter of French solar cell producer Photowatt, put under judicial protection, together with President Nicolas Sarkozy, but without giving a timeframe.

The French solar plants that use 60% of EU-made equipment, such as panels or inverters, will benefit from a power price bonus of around 10%.

This mirrors a programme in Italy which already favours European products in a market dominated by Asian manufacturers.

"For the moment, the Italian tariff has not been attacked, so we are not going to refrain from giving a helping hand to French industry," the minister said, according to AFP.

The ministry is expected to publish a tariff decree in April, when presidential elections take place, following a consultation period with the industry which will determine the final details of the premium.

Nicolas Sarkozy on Tuesday visited the headquarters of the bankrupt photovoltaic cell manufacturer, the only one in France, to announce a takeover offer by state-owned utility EDF.

Like many other French photovoltaic companies, Photowatt was a victim of a reduction in tax breaks on solar panels decided at the end of 2010, after a speculative bubble fed by a boom in connection demands and a backlog of solar power projects in the pipeline.

French renewable lobby group SER reacted cautiously to the premium announcement. "If this measure appears to go in the right direction, we are waiting to be informed of the mechanisms that the government is going to propose to put it into practice," SER said in a statement.

Favourable regulatory regimes and rapid technological evolution have helped the solar photovoltaic sector to get onto its feet quickly.

But many now fear that the sudden removal of tariffs, often retroactively as seen in Spain, is damaging future growth prospects, particularly in Europe.

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