German Government to ‘Definitely’ Cut German Solar Subsidies

Just as California Governor Arnold Schwarzenegger signs into law a statewide feed-in tariff (see Margaret’s post from a few hours ago), Bloomberg has reported that Germany’s new ruling coalition intends to reduce incentives for solar power generation:

While talks “are still in a preparatory phase” on energypolicy for the next four years, “we’ll definitely cut solar subsidies,”Georg Nuesslein, the deputy energy spokesman for Merkel’s ChristianDemocrats and their CSU Bavarian sister party, told reporters in Berlintoday.

Germany, the world’s largest market for solar products last year,guarantees renewable energy generators fixed amounts for the power theyproduce to nurture solar-panel makers such as Bonn-based Solarworld AG.Merkel’s prospective allies, the Free Democrats, or FDP, have calledfor those subsidized tariffs to be slashed, arguing they drive up theprice of electricity.

“We’ll meet the FDP proposals halfway,” Nuesslein said, withoutbeing more specific. Owners of solar panels receive as much 43 eurocents (64 U.S. cents) per kilowatt-hour of power they generate. That’sset to fall as solar equipment becomes cheaper.

Since its introduction in 2000, Germany’s feed-in tariff has beenwidely credited with spurring phenomenal growth in the domestic solarenergy sector. The costs associated with paying a premium price forsolar power, however, have fallen in part on consumers. At least oneGerman panel maker, meanwhile, has complained that the subsidies have benefited foreign manufacturers— namely Chinese firms — at the expense of domestic producers. Whileit’s not clear whether such complaints have influenced the coalition’sdecision, it is hoped the cuts in solar subsidies will reduce costs forelectricity users.



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