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The Czech government approved a renewables energy framework plan on Wednesday aimed at curbing the kind of subsidies that have led to a solar boom that ranks as Europe’s third largest.

The plan, adopted late in the day, calls for a cap on tariffs for solar energy of about half the current level and seeks mandatory recycling of old solar panels. It also seeks annual limits on subsidies for wind and solar power.

“This is one of the measures that the government…is taking in reaction to the current rapid development of some renewable resources and connected economic risks, ” government spokesman Tomas Bartovsky said in a statement.

“It defines limits for various sources. When these are exceeded, the government will interrupt or cancel subsidies.”

In March, Czech lawmakers overwhelmingly approved a law to control the solar energy boom that has triggered fears of a steep rise in electricity prices and future power grid instability.

The legislation came after the combination of a drop in the price of solar panels and high fixed tariffs brought the return on the initial investment for some plants down to as little as three years.

These generous subsidies made the Czech Republic the third biggest solar power country in Europe last year behind Germany and Italy in terms of newly-installed capacity.

“This will for example allow us to halt the rocket-like growth of photovoltaic power plants,” Bartovsky said.

Reuters, 25 August 2010