Germany to Reduce Solar Incentive Cuts

Germany’s Upper House of Parliament voted on Friday morning to delay impending cuts to the country’s lucrative solar incentives. The cuts proposed by Chancellor Angela Merkel would reduce feed-in tariff (FIT) incentives for rooftop installations by 16 percent and cut payments for open field PV projects by 15 percent. The Upper House has sent a bill to committee that requests a smaller reduction of only 10 percent.

Anticipation in the lead up to the incentive cuts, set to kick in next month, has sent a wave of apprehension through the global solar industry, with many companies searching out new markets to replace expected losses in Germany.

Germany’s feed-in tariff laws, which pay providers a premium for solar electricity, have propelled the cloudy European nation into the unlikely position of world leader in solar energy production.

The new bill may be more of a delay of the cuts than anything. The Upper House, which represents Germany’s 16 states, sent the bill to a conciliation committee consisting of members of the Upper and Lower Houses. It does not require approval of the committee’s decision by the Upper House, and Merkel’s group reportedly still has the power to reject any changes by a second vote in the Lower House.

The existing proposal for incentive cuts is in addition to cuts previously scheduled under Germany’s Renewable Energy Act. A 10-percent cut was enacted at the start of 2010. The new cuts are scheduled to start on July 1, although that looks like it will be delayed. For how long exactly remains unclear.

Germany’s government also plans to include nuclear power in their clean energy equation by extending the lifespan of existing nuclear power plants. This would be a reversal of current policy stating that all of the country’s 17 remaining nuclear plants must be shut down by 2021.

Sources: Wall Street Journal, Solar Industry Magazine

Photo Credit: Energy Tech Stocks