French Minister for the Environment Nathalie Kosciuso-Morizet has announced a new, reduced solar feed-in-tariff (FIT) rate: 0.12 euros per kWh for both roof-mounted and ground-mounted systems over 100 kW in capacity. This new rate goes into effect today.

Ground-mounted systems will now receive FIT payments at least 57% lower than what was available in September 2010, according to Germany-based market research firm EuPD Research. Rooftop systems now face a 70% FIT reduction from September 2010's rates.

"There are difficult times ahead for these projects," says Markus A.W. Hoehner, CEO of EuPD Research. "These systems were planned using a completely different calculation model, and some of them will partly be recalculated."

FITs for smaller PV systems will be reduced by 20%, and over the course of this year, quarterly declines of 10 percentage points will go into effect, EuPD Research adds. Furthermore, last month, France announced a PV market cap of 500 MW.

"Such adjustments are ambitious but nonetheless necessary for the long-term remedy of PV price divergences in various national markets," says Markus Monssen-Wackerbeck, head of energy and utilities at EuPD Research.

"The industry should use this pressure to bring high systems prices in the country down to a competitive, European level," Hoehner adds. Figures from the current European PriceMonitor published by EuPD Research show that, on average, the costs for a French PV system under 10 kW are approximately 4,400 euros and peak at 6,000 euros.