Bloomberg News

Germany May Delay Solar Subsidy Cuts, Lawmaker Says

March 01, 2012

Germany, the world’s biggest solar- power market, may delay a plan to cut subsidies in the industry by at least three weeks to allow developers to complete projects, a lawmaker said.

Chancellor Angela Merkel’s coalition government is debating changes to draft legislation, which proposes to reduce the premium rates paid for solar power by as much as 29 percent starting March 9 and to cut them further every month from May.

“We want to push back the date to at least April 1 for rooftop units,” Georg Nuesslein, an energy spokesman for the Christian Social Union, the Bavarian sister party of Merkel’s Christian Democrats, said today by telephone. The government is also debating details of a “reasonable transitional solution” for large-scale ground-mounted plants, he said.

Germany is seeking to cut the annual pace of solar installations by half after incentives for the industry pushed capacity past government targets. The opposition Green Party, the state premier of Saxony-Anhalt and companies including Solarworld AG (SWV), the country’s largest solar-panel maker, have protested that the cuts are too drastic and too soon.

Project Completion

The original proposal, endorsed by the Cabinet yesterday, would eliminate aid for plants larger than 10 megawatts after July 1. Amendments under consideration would ensure that developers who have invested in projects with the current tariffs in mind can actually complete them, Nuesslein said.

The initial proposal also includes a clause giving officials authority to amend subsidy levels without fresh backing from parliament. That clause would come into force if installations exceed the government target of 2,500 to 3,500 megawatts a year.

The clause “will be linked to a parliamentary process” giving lawmakers a certain amount of time to reject or change subsidy adjustments proposed by ministers, Nuesslein said.

The premium-tariff reductions add to pressure on solar companies such as Q-Cells SE (QCE) and Conergy AG, German producers that are already struggling with rising competition from China, where the world’s three biggest panel makers are based.

Nuesslein said coalition lawmakers have no plans to adjust the level of subsidy cuts before a draft bill goes to parliament.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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