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France Suspends Solar Energy Developments for Three Months

Dec. 10 (Bloomberg) -- France suspended solar-energy projects for a less-than-expected three months as it studies potential subsidy cuts and measures to limit growth in the industry after a surge in developments.

The halt applies to projects with a capacity of more than 3 kilowatts, according to a government statement today. The rules will allow projects that have agreed on so-called feed-in tariffs more than nine months ago with Electricite de France SA to go ahead, as long as output is started within 18 months.

A draft of the rules circulated last week by industry groups indicated a four-month halt to projects. The groups called on the government to limit it to two months, saying the move will lead to lost jobs, canceled projects and financial difficulties for some companies.

Prime Minister Francois Fillon last week announced the planned halt to quell a “veritable speculative bubble” in the photovoltaic energy industry. French solar capacity has surged as costs fell while regulated tariffs EDF pays for the power have remained relatively high. Capacity is expected to rise to about 2,150 megawatts at the end of 2011 from 200 megawatts in 2009, according to the energy regulator.

The government is studying rules for the industry expected by mid-February that could include annual caps on development and an additional lowering of tariffs after two cuts this year.

“What we don’t want is for EDF’s distribution network to have total control over which projects go ahead,” Andre Antolini, head of the French renewable industries organization Syndicat des Energies Renouvelables, said by telephone. “This is unacceptable for everyone.”

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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