July 1 (Bloomberg) -- Spain's industry ministry proposed reducing the electricity rate paid to photovoltaic installations by as much as 35 percent, Cinco Dias newspaper reported.

The ministry also is considering basing prices according to whether the photovoltaic solar panels are placed on the ground or on roofs, rather than by the amount of their power capacity, the newspaper said. It cited minutes of a meeting the Photovoltaic Energy Industry Association had with Pedro Marin, the energy secretary.

The ministry, the government agency that sets power rates, wants to establish a limit of new capacity for the industry next year of 300 megawatts, 200 of which would be for installations on roofs, and the rest for ground equipment, the newspaper said.

The new tariff would be 33 euro cents (52 U.S. cents) a kilowatt-hour for roof installations and 29 cents for panels on the ground, the report said. Most have been receiving 45 cents, the newspaper said.

To contact the reporters on this story: Charles Penty at cpenty@bloomberg.net

Last Updated: July 1, 2008 02:36 EDT