Oct. 13 (Bloomberg) -- Germany’s next government plans to reduce incentives to generate solar power as early as 2010, the energy spokesman for Chancellor Angela Merkel’s Christian Democrats said.

Shares of Bonn-based Solarworld AG and Q-Cells SE based in Thalheim fell after Joachim Pfeiffer said that Solar capacity has “massively increased” by about 3000 megawatts this year at the same time as the price of solar-power panels has plummeted. The government is “obliged” to address the matter, Pfeiffer told reporters in Berlin today.

“We will review the overall renewable energy law in 2011 but will undertake reductions in solar subsidies taking effect as soon as next year,” Pfeiffer said after a meeting of a group negotiating energy policy for the next four years for Merkel’s prospective coalition with the Free Democratic Party.

Germany, the world’s largest market for solar products last year, guarantees renewable energy generators fixed payments for the power they produce to nurture solar-panel makers such as Solarworld. The Free Democrats have called for those subsidized tariffs to be slashed, arguing they drive up the price of electricity.

Owners of solar panels receive as much 43 euro cents (64 U.S. cents) per kilowatt-hour of power they generate. That’s set to fall as solar equipment becomes cheaper. The normal consumer price per kilowatt-hour is about 20 euro cents.

Solarworld slumped 2.9 percent to 16.16 euros, while Q- Cells slid 2.3 percent to 13.27 euros.

Nuclear ‘Framework’ Agreed

Pfeiffer said the energy group also sealed a “framework” for extending the lifespan of nuclear-power reactors in Germany, overturning a moratorium on atomic power introduced in 2002 by then Chancellor Gerhard Schroeder’s Social Democratic-led government with the Green party. At present, Germany’s 17 nuclear plants are due to close by about 2021.

While Pfeiffer said the group hasn’t yet agreed on a fixed period for the extension, Guenther Oettinger, the prime minister of Baden-Wuerttemberg state and a fellow member of the working group on the economy and energy, told reporters that nuclear energy “will continue to play an important role for a minimum of twenty years.”

Individual plants’ life-cycle will be tied to their technological and safety standards, Oettinger said.

Members from the three coalition parties -- Merkel’s CDU, its CSU Bavarian sister party and the Free Democrats -- also agreed to hold to a prior goal of producing 30 percent of power from renewable sources such as wind, wave or solar energy, Pfeiffer said.

Meeting Halfway

Georg Nuesslein, the CDU/CSU’s deputy energy spokesman, said yesterday that the new government “will definitely cut solar subsidies.” The CDU/CSU “will meet the FDP proposals halfway,” he said, without being more specific.

Lawmakers formulating policy on the economy and energy form one of 10 working groups on issues such as tax, finances and the budget, the labor-market, and foreign affairs and defense that aim to hammer out a coalition agreement by Merkel’s stated deadline of Nov. 9, the 20th anniversary of the fall of the Berlin Wall. A steering committee of coalition leaders is scheduled to meet tomorrow, then again from Oct. 16 to Oct. 18.

“We’ve brought about 50 percent of all policy proposals to paper for the steering group to decide,” Alexander Dobrindt, CSU general secretary, told reporters in Berlin today. Even so, “it’s clear that the coalition group will have to make decisions on a double-digit number of issues over the weekend.”

To contact the reporter on this story: Brian Parkin in Berlin at bparkin@bloomberg.net

Last Updated: October 13, 2009 11:40 EDT