European FITs made it possible
Feed in tariffs (FITs) are a policy tool that promote the use of renewable energy. Germany was the first European country in which the generation of solar electricity was heavily and sustainably promoted. In 1990 Germany adopted the "Law on Feeding Electricity into the Grid” which was revised in 2000 with the Renewable Energy Sources Act to oblige electricity suppliers to buy electricity from renewable energy sources at a fixed price for the next 20 years.
The Renewable Energy Sources Act is now regarded as the world's most successful promotion of a new technology. As a result, a vibrant new and broad-based industry emerged from the development of manufacturing equipment to silicon, wafers, cells and modules.
The German photovoltaic boom has had two positive outcomes for other European countries. First, Germany successfully demonstrated that PV actually works. Secondly, the high demand for photovoltaic modules in Germany resulted in strong competition which in turn led to innovation and significant price reductions.
Italy, Spain, France and other EU countries also wrote their own success stories based on FITs. In 2011 Italy became the world’s biggest solar photovoltaics installer, taking this title over from Germany. Not only European solar companies benefited from this development, but also companies in China who sell nearly all of their products to Europe thanks to European funding for solar technologies. Since China offers neither a functional or profitable market, European support measures helped build a solar industry in China.