Germany May Drastically Cut Solar Subsidies

Brian Hicks

Written By Brian Hicks

Posted November 17, 2011

Germany, the world’s largest market for solar power, plans to reduce solar power installations to one gigawatt a year, Economy Minister Phillip Roesler says.

If Germany follows through with this plan it could ultimately crush their growing renewable energy industry, and knock the country out of first place for the world’s largest solar panel market.

“It would push the solar industry out of Germany,” said Hans- Josef Fell, a Green Party lawmaker who helped invent the country’s solar subsidy system, reports Bloomberg.

What’s the reasoning behind this decision?

Reuters reports:

The suggestion follows a newspaper interview by Economy Minister Philipp Roesler, leader of Chancellor Angela Merkel’s junior coalition partners the Free Democrats, who said reducing new capacity to 1,000 MW, or 1 gigawatt (GW), per year would help contain costs of the incentives that utilities pay to solar power producers.

Roesler is reported as telling the Rheinische Post that reducing panel installs to 1 gigawatt will help reduce electricity costs. The proposal will be presented by the end of January to change the renewable energy law.

Reuters reports that Spain carried out a similar plan as Germany is considering, and fell from the largest market in 2008 to the possible eighth largest this year.

It was only one year ago that Germany installed a record number of 7.3 gigawatts of new solar power capacity, “…which was nearly half of the world’s total of 16.6 GW installed, figures by the European Photovoltaic Industry Association (EPIA) showed,” reports Reuters.

The proposal is very controversial and it is expected that the Economy Ministry will not easily persuade the Environment Ministry. Reuters says that last year the Environment Ministry “…reformed the feed-in tariff system to cut incentives to 28.74 cents per kilowatt hour (kWh) and is opposed to further cuts.”

It’s still unclear what path Germany’s solar industry will go down. In the meantime Germany has plans to add an additional 5.2 gigawatts to the industry this year.

That’s all for now,


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