France’s Energy Regulatory Commission (CRE) recently announced major adjustments to its solar Feed-in Tariff (FIT) scheme, marking a pivotal transition in the country’s solar policy from fixed subsidies towards market-based pricing. The new policy implements differentiated adjustments to electricity rates and subsidies for PV systems of different capacities. Projects over 100 kW will be fully incorporated into market tenders. While this aligns with the EU’s trend of subsidy phase-outs, it has raised industry concerns about shrinking investment and job losses.
The new policy specifies that the FIT guarantee for PV installations under 100 kW in mainland France will remain valid until January 1, 2026, and applies only to systems installed on buildings, sheds, or shade structures. Tariff adjustments follow a “tiered reduction” pattern: systems at or below 9 kW maintain the existing rate of €0.04/kWh; rates for 10-100 kW systems drop to €0.06/kWh, a 15% decrease; rates for 9-36 kW systems fall 16% to €0.10/kWh, while 36-100 kW systems receive €0.09/kWh. Regarding installation subsidies, systems below 9 kW remain stable at €80/kW, while subsidies for 9-36 kW and 36-100 kW systems both decrease by 11%, to €160/kW and €80/kW respectively.
Notably, 100-500 kW PV systems are excluded from the FIT scheme for the first time and will be required to participate in mandatory public market tenders starting September 2025. The CRE emphasized that this move aims to alleviate grid congestion caused by the surge in distributed PV, while also reducing end-user electricity costs through market competition – a response to the 2024 government intervention triggered by a 12% increase in household electricity prices due to subsidies.
The policy changes have already sparked strong reactions from the industry. French solar association Enerplan pointed out that the tariff cuts for 36-100 kW systems exceed expectations, potentially driving project investment returns below 5% and threatening the survival of local installers. The French Renewable Energy Union (SER) further warned that the industry could face the loss of 3,000 jobs in 2025. From a market response perspective, sub-9 kW projects remain attractive due to stable subsidies but will need to rely on “self-consumption + surplus grid feed-in” models to enhance returns; 10-100 kW projects require energy storage pairing or Power Purchase Agreements (PPAs) to offset losses; projects over 100 kW must accelerate technological upgrades, adopting bifacial modules and smart O&M systems to cope with tender competition pressure.
Compared to European neighbors like Germany and Italy, which have also phased out FITs but maintained industry incentives through tax credits or green certificate trading, France’s reform, though later to the trend, is more radical. Analysis suggests that the short-term tariff and subsidy cuts may dampen investment enthusiasm, leading to slower market growth. Looking beyond 2026, policies are expected to tighten further. Investors should closely monitor the upcoming CRE guidelines on storage subsidies to adapt to the new fully market-oriented industry landscape.
