No decrease in feed-in tariffs for French solar electricity

Although the French government is seeking to develop renewable energies in France, it had recently been looking to renegotiate the solar energy feed-in tariff (€600 per MWh) set under existing contracts (ie contracts concluded mainly between 2006 and 2010 which allowed producers to sell the electricity produced at a fixed price, independently of supply and demand in the market). This proposition had been included under an amendment to the 2021 finance bill (projet de loi de Finance pour 2021).

The rationale behind such reduction of the feed-in tariffs is that electricity prices currently negotiated under contracts benefiting from the purchase obligation have fallen down on average between €60 and €200 per MWh.

While the French National Assembly (Assemblée Nationale) voted favourably on the amendment on 13 November, the Senate (Sénat) rejected it on first voting on 27 November.

The senators fear that this amendment will (i) weaken the trust relationship between the State and the producers, (ii) represent a financial burden for producers who have based their business plans on a forecast of turnover from feed-in tariffs and (iii) reduce the attractiveness of the solar industry.

What's next?

Although one can hope that the amendment will be abandoned, the fact that the Senate voted against it simply means that the government will have to rewrite the proposed amendment and to convince the senators. The amendment should be redrafted and the finance bill adopted at the latest 1 January 2021.