Germany in 2010: Consensus seems to be that there will be FiT cuts in Germany that are greater than what is stipulated in the current EEG, but the magnitude will be such that it will not kill the German manufacturing industry. There will be some price re-adjustment but demand will remain strong as long as there is no cap. The German residential/small commercial market (80% of total market) is relatively IRR insensitive and will continue to go solar so long as it a net positive transaction for the project owner.

Italy in 2010: There has been a lot of debate on what the Italian market size will be in 2010. I spoke with a bunch Italian project integrators and asked them to outline the exact procedure to construct both large and medium sized plants in Italy. Conclusion:  the entire process and hence the market is utterly complex and uncertain. While the Italian market will be big in 2010 due to pressure from an impending FiT hange in 2011, 1 GW might be a bit too ambitious because of the procedural hassles. But based on the strength of the residential market and the few large projects that will get constructed the market can expect to be about 800 MW in 2010.

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