The government’s proposed cuts to the renewable energy feed-in tariff (FIT) are unacceptable and harmful to the long-term viability of the industry, solar power operators said yesterday.
The Ministry of Economic Affairs has proposed slashing the FIT for ground-mounted solar power by 12.15 percent to NT$3.7228 per unit, in addition to a 11.6 percent reduction for floating solar power to NT$4.1665 per unit.
The proposed cuts far exceed the global average reduction of 4.25 percent earmarked for next year, and such a change would significantly affect local development of solar power, given the higher costs required to build projects in Taiwan, the Photovoltaic Generation System Association of the Republic of China, trade group SEMI’s photovoltaic committee and the Taiwan Photovoltaic Industry Association told a news conference in Taipei.
The local solar power industry is subject to higher land rent costs and other obligations, such as furnishing incentives to local governments and land owners, environmental conservation and precautions against typhoons, earthquakes and saltwater damage, the groups said, joining protests voiced by offshore wind farm developers on Friday last week.
These factors lead to a 30 percent reduction in solar power revenue, the groups said, adding that the industry would not be able to cope with such steep FIT cuts.
United Renewable Energy Co (聯合再生能源) chairman Sam Hong (洪傳獻) said that the government should raise the FIT for operators willing to build their own booster stations.
The FIT should be raised at least 6 percent to NT$3.9686 per unit, as booster stations are costly to build and are an important part of integrating renewable energy into the power grid, Hong said.
While the cost of solar panels has been decreasing by 10 percent annually, the panels only represent 25 percent of a solar power generation system, which translates to a reduced cost of 2.5 percent, Hong added.
“The government’s proposed FIT cuts simply do not suit the situation in Taiwan,” Hong said, adding that raising the FIT by 9 percent would be ideal for operators with larger commitments.
Local companies are not demanding greater profitability, as many are still operating in the red, he added.
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