Germany may introduce solar subsidy cut three months sooner

Germany, the world’s biggest market for solar power, is considering whether to accelerate the pace of reductions of subsidies to the sector.

Environment Minister Norbert Roettgen and Economy Minister Philipp Roesler will detail support for energy efficiency and the solar business in Berlin.

Chancellor Angela Merkel’s government is working to curtail a boom in solar installations that outpaced targets for renewable energy, which ministers are encouraging as a replacement for nuclear power that’s being phased out by 2022.

The ministers have been considering a cut to subsidies as early as April 1, said Klaus Breil, a lawmaker with Roesler’s Free Democratic Party, the junior coalition partner in government. The next reduction is scheduled for July 1.

Aid should be lowered “between 25 per cent and 35 per cent as we need to contain what has become a financial investment vehicle,” Breil, the party’s energy policy spokesman, said in a phone interview. “I don’t think a hard installation cap will be introduced as there was no majority for that in the coalition’s working group.”

Roettgen and Roesler are aiming to adjust the feed-in tariff granting above-market rates for solar power after 7.5 GW of the panels were installed in 2011. That was more than double the government’s goal and equal to the capacity of more than six atomic plants.

Roesler has previously called for limiting solar installations to about 1 GW per year. Roettgen, whose ministry is responsible for the subsidy law, is seeking to increase the frequency of subsidy cuts but has in the past opposed a fixed limit.

Such cuts may threaten German solar companies such as Q- Cells SE (QCE) and Conergy AG (CGYK), which are already struggling with rising competition from China where the world’s three largest panel makers are based.

A total of 50 companies including Solarworld AG (SWV) and SMA Solar Technology AG (S92) will protest tomorrow against what the industry fears will be “drastic” cuts to solar subsidies, an industry group said.

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