Berlin cuts solar subsidies
February 26, 2012
After months of wrangling, Germany's liberal economics minister Philipp Rösler and conservative environment minister Norbert Röttgen thrashed out a compromise Thursday, envisaging cuts to state subsidies for solar power generation of about 30 percent.
Starting March 9, prices for solar energy guaranteed by the state would be lowered by 20 percent initially, to be followed by further monthly cuts down to 30 percent by next January, Röttgen told a news conference in Berlin.
In addition, Röttgen said that the government would gradually "lower its target for new photovoltaic installations" by 400 megawatts per year, starting in 2014.
Under current government plans, Germany aims to build 3 gigawatts of new solar installations a year - a target that was massively exceeded in 2011 when a record of 7.5 gigawatts of new installations went online.
As a result, solar subsidies soared to an all-time high of 6 billion euros ($7.9 billion) last year.
"The cuts reflect the increasing competitiveness of power generation using solar panels," Röttgen said.
Storm of protests
Germany is a world leader in solar power with about 25,000 megawatts of installed capacity, generating about 4 percent of the country's electricity.
Germany's solar industry described the accelerated cuts in subsidy as a serious blow.
"This is a slap in the face," First Solar chief executive Daniel Wortmann told Reuters news agency.
Solarworld CEO Frank Asbeck told the same agency that he expected the solar power market in Germany to "come to a standstill," because large solar farms would "no longer be profitable," since they would suffer bigger cuts than smaller ones.
Environment group Worldwide Fund for Nature (WWF) said it considered the planned subsidy cuts " hugely out of proportion."
"The cutbacks risk spelling the end of the success story of solar power generation in Germany," WWF board director Eberhard Brandes told dpa news agency.
Röttgen said that the March 9 target for the cuts to start was not yet fixed, adding the change could only come into effect on April 1, depending on how quickly it passes parliament.
uh/mll (dpa, Reuters, AFP)