Germany continues to outstrip the rest of the world in solar power capacity, and is adding new solar faster than any other country as well. According to the trade publication Solarserver, Germany Trade and Invest (GTAI), the nation's economic development agency, says that Germans installed 320 megawatts of photovoltaic (PV) capacity in August 2012, putting the nation's overall PV capacity above 30 gigawatts -- roughly 24 times California's current total solar capacity.
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Germany's only global competitor in PV capacity is Italy, with about half Germany's capacity installed by the end of 2011. Both Germany and Italy rely on robust feed-in tariffs to promote PV development; under a feed-in tariff arrangement, owners of small PV installations are paid a premium amount for any power they "feed in" to the grid.
Due to the success of its feed-in tariff, Germany's solar infrastructure boom has brought installation costs low enough that for the last year it's actually been cheaper to power your home entirely with your own solar panels than it is to buy power from the grid -- even counting feed-in tariff payments.
While the German and Italian solar sectors are gaining steam, California -- with an economy roughly the size of Italy's -- is making gains in PV capacity that are only modest by comparison, and lackluster incentives are the main reason. Last week San Diego Gas & Electric's rooftop solar incentive payments through the California Solar Initiative (CSI) fell to 20¢ per installed watt, from a high of $2.50 when the CSI began in 2006. The CSI calls for incentive levels that decline over time as the program approaches a target of just under 2 gigawatts of installed PV.
Germany's feed-in tariff, now set at about 25¢ per kilowatt hour, is also planned to decline as the European economic powerhouse approaches a solar target -- of 54 gigawatts of installed capacity. GTAI expects the country will meet that target in the next three years, at which point PV will provide a tenth of the country's power.