German Coalition Backs Off Plan to Slash Solar Subsidies
German officials have backed off threats to cut subsidies to the solar industry and instead will talk to industry officials about “adjustments” to the subsidies, Bloomberg reports today.
The news gave a boost to shares of Solarworld, Q-Cells and Phoenix Solar, which stood to lose from the coalition government’s planned subsidy cuts. Shares in Norwegian solar equipment maker Renewable Energy Corp. also made gains, according to Reuters.
The pro-market Free Democratic Party, which is propping up Chancellor Angela Merkel’s Christian Democratic Union, had been pushing for significant cuts in order to provide taxpayer relief.
Reuters reported two weeks ago that a draft of the report called for tariffs that utilities have to pay for solar power to be lowered quickly.
Shares of solar industry companies took a dive after the news.
German utilities have to pay 43 Euro cents per KWh to owners who build solar powered systems. The tariff is scheduled to drop for smaller plants in 2010 and again in 2011.
German Renewable Energy Federation (BEE), the industry’s Berlin-based lobby group, issued a statement praising the government’s new approach and saying that the “security of investment is essential for the development of an emerging industry.”
