EU FITs effective, but not sustainable

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Growth in the European renewable energy sector, specifically wind and solar, brought on by government policies such as capital grants, subsidies, tax credits and energy production payments may be damaged by economic instability in the region, according to new research by GlobalData.

While effective, the research found that the level of subsidization available on renewable power generation cannot be sustained by the current financial environment.

Across Europe, feed-in-tariff (FIT) reductions are being met by reductions in costs, negating direct financial impact, but caps on renewable installations and more impressive policies available elsewhere, will likely have a negative effect on new installations in the European renewables sector. This is likely to shift attention elsewhere, giving a knock to all those across the entire European supply chain, according to GlobalData.

The German government has already decreased their FITs due to concerns about the over-subsidization of renewable technologies with the UK, Spain and France following suit – even after FITs for solar resulted in considerable growth of installations.

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