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German Govt Plans To ‘Starve’ Solar Boondoggle

A German plan backed by Economy Minister Philipp Roesler to reduce solar power installations in the world’s biggest market to 1 gigawatt a year would “starve” the renewable industry, an opposition lawmaker said.

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

Roesler told today’s Rheinische Post newspaper that reducing panel installs to 1 gigawatt from July 2012 will help bring down electricity costs. Environment Minister Norbert Roettgen is due to present proposed changes to the renewable energy law by the end of January, the newspaper said. Calls to the Economy and Environment ministries weren’t returned.

Germany added a record 7.4 gigawatts of panels last year. Solarworld AG (SWV) and Q-Cells SE (QCE), Germany’s biggest solar cell and panel manufacturers, this week reported wider-than-expected losses on slowing demand in their home market and falling prices amid a glut of supply.

The newspaper said an energy working group comprising government lawmakers agreed to the 1-gigawatt target. Michael Kauch, environmental spokesman of Roesler’s Free Democratic Party, denied this today.

Acceptable Levels

While the group asked the Environment Ministry to find ways to keep costs linked to the expansion of renewables at acceptable levels, it hasn’t agreed to “concrete subsidy adjustments,” Kauch said in an e-mailed statement.

German legislation includes a so-called breathing cap to keep installations from 2.5 gigawatts to 3.5 gigawatts a year, a level confirmed today at a conference in Berlin by Deputy Environment Minister Juergen Becker. Additions exceeding that target corridor trigger greater subsidy cuts.

The working order received by the Environment Ministry “explicitly contains no hard cap,” in which no more installations can be made, Kauch said. Options discussed included lowering the “breathing” cap’s target range or implementing steeper cuts when it is breached, he said.

“It damages the solar industry if it exceeds the breathing cap again and again,” Kauch said earlier in Berlin today.

In January, Germany will reduce subsidies by a record 15 percent after the country added about 5.2 gigawatts of panels in the year through Sept. 30.

Bloomberg, 17 November 2011