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Germany: Blocked Funds Cause Stop of Rebate Programme

Submitted by Baerbel Epp on April 28, 2010

The after effects of the financial crisis are again threatening the German solar sector: Not only had the industry to cope with a 25% decrease in sales in 2009, but now the National Rebate Programme for Renewable Energies (MAP) seems to already run out of money – although the new year is not even half over.

The MAP subsidizes solar heating and cooling systems, as well as heat pumps and biomass boilers and has been fairly successful in Germany for many years. EUR 426 million were spent in 2009 alone, which prompted further investments by the private sector of EUR 3 billion, according to the statistics of the German Federal Environment Ministry (BMU).

The original version of the 2010 annual budget stated funds of EUR 448 million, split between the MAP (EUR 291.3 million), the KfW banking group, which offers low-interest loans for larger renewable heating systems (EUR 55 million) and Germany´s Climate Initiative (EUR 68 million); the remaining funds were intended for administrative overhead expenses. EUR 291.3 million may seem a lot of money at first, but if one look at how many demands have to be met with it and it seems not so much after all.

First, MAP already experienced a lack of funds last year, which means there are still a large number of applications, which had not been approved until December 2009. According to the BMU, the subsidies for these applications, if approved, will add up to a total of EUR 47.5 million, effectively decreasing this year’s budget before any 2010 application is even considered.

Second, the German Bundestag’s Budget Committee has recently halted the allocation of EUR 115 million to MAP. The discretionary budget has therefore been reduced to EUR 128.8 million. When compared to last year´s demand of EUR 35.5 million per month, it is clear that the funds for this year could be already exhausted by the end of April.

The sudden change in the incentive programme’s budget policy evoked a sharp protest by sector professionals. “It is not acceptable to block funds, which have been guaranteed in the coalition agreement,” heating industry association BDH said in a press release on 16 April. The German Association for Solar (BSW solar) emphasizes that, “in the past each Euro spent within MAP has resulted in further investments of EUR 8 by the private sector”. Even the VAT earned by the state through these further investments exceeds the annual funds provided for the programme. “MAP is the most important means for getting a foothold in the market of solar heating and cooling technology. There must be a bigger budget and not a stop of funds,” Carsten Körnig, Managing Director of BSW Solar, pointed out in press release on 21 April.

The negotiations between the German Federal Ministry of Finance (BMF) and the BMU are still under way, the office of German parliament member Oliver Krischer announced at the end of April. The meeting of the Budget Committee on 24 April did not resolve the situation, as was hoped by the industry. The BMF has not made a request yet to end the freeze on the much needed EUR 115 million. The next possibility to do so will be the Budget Committee meeting on 5 May 2010.

Additional information of the editor on 3 May 2010:

Just a view hours before the May newsletter was sent out, the BMU published a press release in which the ministry announced the stop of the MAP. The reason: THE BMF will not end the freeze of the much needed EUR 115 million.

More information:

BSW solar:
http://en.solarwirtschaft.de/

Heating industry association BDH:
www.bdh-koeln.de/ (in German)

Member of the German Parliament Olivier Krischer:
www.oliver-krischer.eu (German only)

The renewable energy homepage of the German Federal Environment Ministry:
www.erneuerbare-energien.de/

 

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