London (Platts)--30Jun2015/1045 am EDT/1445 GMT

Germany added 101 MW of new solar PV capacity in May, the highest since January, but annual growth remains on track for the lowest level since at least 2007, according to the latest data from the grid regulator BNetzA. So far this year, Germany added only 520 MW of new solar installations, still bringing total installed solar PV capacity to 38.754 GW.

Germany's new solar additions fell in 2014 for a second year in a row. This was down 42% on the year to 1.9 GW, its lowest annual level since 2007, as deeper cuts to solar subsidies have sharply reduced growth in the solar sector after solar additions grew at an annual rate of more than 7 GW for three years between 2010-2012 as the cost of solar equipment dropped rapidly.

"Solar additions over the past 12 months at 1,581 MW are significantly below the annual target of 2,400 MW to 2,600 MW set by the German renewable energy law," the head of BNetzA Jochen Homann said in a statement.

"This level is only marginally above the threshold at which the renumeration for new solar installations would no longer be cut," he added.

Based on that data, feed-in-tariffs for new solar installations will be cut be another 0.25%, as they were in the previous three quarters, BNetzA said.

Germany is also moving towards auctions for larger projects as part of a reform of its renewable energy law to reduce overall costs, with a second tender set for August.

In April, Germany awarded 157 MW of large ground-based solar projects at an average price of Eur91.70/MWh ($99.95/MWh) in its first pilot tender. The average price in the auction is still marginally above feed-in-tariffs for comparable projects.

Solar output in 2014 rose 14% on the year to 35.2 TWh, contributing almost 6% to power demand in Germany, according to BDEW data. April saw new records for solar power generation, which peaked above 25 GW for the first time ever, putting pressure on peakload power prices.

--Andreas Franke, andreas.franke@platts.com

--Edited by Derek Sands, derek.sands@platts.com

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