German solar sector boosted after regions block government

Germany’s troubled solar energy sector has won some breathing space after the country’s regional government blocked subsidy cut plans tabled by Berlin in the upper house of parliament, leading to hope for solar companies that they might avoid the full force of cuts being proposed.

The FT reports that a majority of states voted to send the bill to an arbitration conference with the lower house, the Bundestag, arguing that big cuts to electricity price guarantees threatened thousands of the sector’s estimated 130,000 employees in Germany.

Chancellor Angela Merkel

“We simply can’t accept that Berlin says, ‘the Chinese are cheaper now, so goodbye,’” said Reiner Haseloff, the Christian Democrat state premier of Saxony-Anhalt, adding there would be “a national outcry” if the car sector were so treated.

Chancellor Angela Merkel
’s government wants to cut subsidies for solar-power installations by up to 30 per cent – backdated to April – to reform a support system that has run haywire and left consumers footing a rising bill for evermore sun-powered generation.

Solar energy last year received 60 per cent of price supports, leaving €6bn to be divided among the five other renewable forms.

The chancellor’s spokesman on Friday stressed that Ms Merkel continued to believe that price guarantee cuts – of between 20 and 40 per cent depending on the size of the solar plant – were the only way to reform the system.

But Merkel’s government may have to compromise now that the states have voted otherwise.

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