Germany plans to announce a new incentive program for solar installations on June 7. Market rumors indicate the final version may only cut incentives by 6% due to a lack of installations in the first half of 2011. The solar industry is hoping the new incentive program can help to resuscitate market demand

Industry sources stated installations in Germany in the first half of 2011 were only 1,000-1,500MW. The low installations could decrease the magnitude of the incentive cuts. Industry observers anticipate demand to return in the second half of 2011 when inventory has been cleared out.

Many solar firms believe that June will be the month for revenues to rebound. The price for solar products has been decreasing rapidly, therefore, the industry has been hoping low prices can effectively stimulate demand.

Germany plans to make further incentive cuts in July, hence June has been seen as the month for increasing installations before the cuts occur. However, industry sources indicated that inventory backlogs have not been solved; therefore the return of demand will decrease the stockpiled inventory first.

Industry watchers estimate May installations in Germany reached around 400-500MW, with incentive cuts due to occur in July, installations in June might spike up to 1,000MW. But this is far from likely to be effective in decreasing the inventory backlogs.