Greece: a case of a country not meeting its solar potential

Its neighbor Italy may be in danger of overheating its solar market, but sun-wealthy Greece is facing an entirely different problem: a solar market that can’t get off the ground, despite lucrative government incentives. The Hellenic Association of Photovoltaic Companies (HELAPCO) recently introduced a new incentives program for small residential and commercial that sets a feed-in tariff at 0.55€/kWh for installations up to 10 kW. Installations exceeding that size but less than 10 MW would be subjected to tariffs less than 0.5€/kWh but greater than 0.4€/kWh, which is still more generous than the current programs being implemented by Germany (0.43€/kWh, up to a 30 kW capacity) and Spain (0.34€/kWh).

A solar feed-in tariff may be time-tried example of a government incentive with the ability to transform a nation’s solar PV industry (Germany and Spain, anyone?), but some seem rather pessimistic about the new developments in Greece. According to the Greentech Media article linked above:

“It has excellent solar conditions. But bureaucracy is so high, it’s incredible,” said Daniela Schreiber, head of strategic operations at Germany-based EuPD Research, during a solar conference in San Francisco last week.

Greece first launched a feed-in tariff program in 2006, but it hasn’t been able to run it smoothly. The government had about 3 gigawatts worth of applications waiting to be processed when it announced a new version of the program in January this year.

As exciting as Greece’s new feed-in tariff sounds, I can’t help but wonder if a catch-22 is in the wings waiting to happen. The country’s potential for solar market growth is impeded by the inordinate levels of Hellenic bureaucracy, yet, as Germany, Italy and Spain have proven, the risks of speculation posed by lucrative incentives are plenty. Germany’s solar market may be functioning and growing smoothly right now, but it didn’t get to where it is now without a brief period of adjustment. I can’t imagine that a country known for its bureaucratic red tape might be able to sustain such an attractive solar program without some speed bumps along the way. Thoughts? Do you think a 0.55€/kWh feed-in tariff would be sustainable, especially for a country like Greece?