Germany Plans Solar Aid Policy After Ministers Debate Cuts
Germany, the world’s biggest market for solar power, today will make a statement about subsidies for the technology after ministers debated whether to accelerate the pace of reductions.
Environment Minister Norbert Roettgen and Economy Minister Philipp Roesler will detail support for energy efficiency and the solar business at an event at 12:30 p.m. Berlin time, Bundespressekonferenz e.V. said yesterday in a statement.
Chancellor Angela Merkel’s government is working to curtail a boom in solar installations that outpaced targets for renewable energy, which ministers are encouraging as a replacement for nuclear power that’s being phased out by 2022.
The ministers have been considering a cut to subsidies as early as April 1, said Klaus Breil, a lawmaker with Roesler’s Free Democratic Party, the junior coalition partner in government. The next reduction is scheduled for July 1.
Aid should be lowered “between 25 percent and 35 percent as we need to contain what has become a financial investment vehicle,” Breil, the party’s energy policy spokesman, said in a phone interview. “I don’t think a hard installation cap will be introduced as there was no majority for that in the coalition’s working group.”
Shares Fall
Solar stocks in Asia and Europe dropped on the news. Chinese panel makers Yingli Green Energy Holding Co and Trina Solar Ltd closed down 9.8 percent and 5.5 percent, respectively. In Europe, SMA Solar Technology AG, Germany’s largest solar company by market value, was down 4.3 percent and Solarworld AG (SWV) was down 5.5 percent at 11:15 a.m. in Frankfurt trading.
“Even if it’s good news that there’s no cap, stocks are down because the cuts will drag module prices down and squeeze margins,” Henning Wicht, lead solar analyst for IHS iSuppli, said today from Munich. “If these cuts are confirmed, module prices in Germany will have to come down at least 10 percent.”
Companies don’t see any signal that the German market will stay as strong this year, he said.
Roettgen and Roesler are aiming to adjust the feed-in tariff granting above-market rates for solar power after 7.5 gigawatts of the panels were installed in 2011. That was more than double the government’s goal and equal to the capacity of more than six atomic plants.
More Cuts
Breil said the officials may introduce more frequent revisions to the subsidy as well as bringing forward the date of the next reduction.
Officials responsible for setting subsidy levels across Europe have struggled to keep up as the price of solar equipment tumbled in recent years. Panel prices fell about 46 percent last year, driving installations even as subsidies fell.
Roesler has previously called for limiting solar installations to about 1 gigawatt per year. Roettgen, whose ministry is responsible for the subsidy law, is seeking to increase the frequency of subsidy cuts but has in the past opposed a fixed limit.
Subsidies for large, ground-based plants may be cut by as much as 30 percent while aid for rooftop systems may be lowered by 20 percent, Handelsblatt reported yesterday, citing unidentified people close to the government.
Companies Threatened
Such cuts may threaten German solar companies such as Q- Cells SE (QCE) and Conergy AG (CGYK), which are already struggling with rising competition from China where the world’s three largest panel makers are based.
A total of 50 companies including Solarworld AG and SMA Solar Technology AG (S92) will protest tomorrow against what the industry fears will be “drastic” cuts to solar subsidies, an industry group said.
Company employees will symbolically down tools in several German cities amid fears that the government caps yearly installations to a “fraction” of the level seen in the past year, the BSW solar lobby said yesterday in an e-mailed statement.
Merkel’s cabinet may decide on the subsidies as early as Feb. 29, BSW said.
To contact the reporters on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net; Marc Roca in London at mroca6@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
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