I knew the Government mess up the solar market but I never knew just how much incompetence was at play there. Loosing industry to China (I am still furious about KUKA) is apparently a recreational sport for the CDU.
You got it wrong. The policies that heavily subsidized the solar industry were written by Merkel when she was the Minister for the Environmental Affairs in the 90s, but put in place by Minister Trittin from the Green Party after the '98 elections. The death of the German Solar industry was the result of KEEPING those subsidies TOO HIGH FOR TOO LONG. If the government makes sure that the demand is increasing at a very high pace, all you will do as a manufacturer is t put all the cash you can get your hands on into scaling your production with the current state of technology. You'll stop all R&D, because the immediate ROI of selling "state of the art crap" is much higher. In the mean time, China created competitive technology with lower cost and finally, at some point in time, they've even created the better solar panels.
Thats sadly wrong, Chinas solar industry was heavily subsidized by the state to purposely crash the market prices of panels and ruin the solar industry of western countries. Once they succeeded they raised prices again to make profit.
So Chinese subsidies are “purposely crashing the market”, while German subsidies are... what exactly? Well, they did not crash the market, but they crush innovation and competitiveness, while China improved.
Have prices actually increased? Lazard's Levelized Cost of Energy analysis shows a steady decline in cost https://www.lazard.com/media/451447/grphx_lcoe-09-09.jpg but that also includes operating costs. I can't find a source for the solar panels themselves.
They just didn't decrase as fast as they could have, given falling prouction cost. But then again, the market was heavily distorted by German and Chinese subsidys anyways, so it is hard to know what the subsidy-free "real" market prices would have been.