The German government plans to make regular cuts more often to the subsidies paid to solar photovoltaic (PV) installations in order to rein in the country’s solar energy boom.
Germany’s Energy and Environment ministries have unveiled proposals to make a one-off cut to feed-in tariffs (FiTs) paid to PV plant owners, followed by monthly reductions starting in May.
The maximum size of PV plant that can receive the FiT subsidy would also be reduced under the plans.
The proposals have been approved by the German Cabinet and will be sent to Parliament for consideration. They have sparked protests in Germany and the solar energy industry has expressed concerns over the impact of the proposed cuts.
Carsten Körnig, chief executive officer of BSW-Solar, the German Solar Industry Association, said that the proposals amount to “a solar phase-out law” that would harm the transformation of Germany’s energy system. He added: “At stake is also the existence of many tens of thousands of jobs in one of Germany’s most important future-oriented industries. Apparently … the interests of the major energy corporations have prevailed. Now we are faced with a major environmental and energy policy rollback.”
The German government argues that the cuts are necessary in order to reduce the growth of the solar PV market and to bring the FiT scheme in line with the reduced costs of PV components. If approved by parliament, an initial cut of between 20 and 29 per cent would be made to FITs, followed by a monthly €0.15/kWh cut.
Installations over 10 MW in size would not be eligible for FIT subsidies.
Germany has installed 7.5 GW of capacity annually in the past two years, but the government expects the new rates will reduce that volume to 2.5-3 GW per year in 2012 and 2013.
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