Germany May Pass Solar Subsidy Cuts by July 7 After Bill Blocked

Germany may pass legislation to cut solar-power subsidies before July 7 should the government and regional leaders reach a compromise this week, according to an official at the Federal Environment Agency.

Chancellor Angela Merkel’s plan to cut solar subsidies by a record from April 1 was blocked by officials in the upper house last month on concerns it would hurt employment. The bill was sent to a parliamentary panel for arbitration, which meets June 13, according to Carla Vollmer, head of the renewable energy section at the agency.

“If consensus can be reached on this day, it’s possible to pass the bill before the summer break,” starting July 7 at the latest, Vollmer told a solar conference today in Munich.

Merkel plans to lower by about half the pace of annual solar installations after incentives pushed new projects to a record 7.5 gigawatts last year. Germany plans to have 52 gigawatts of panels by 2020, with a yearly installation rate of 2.5 gigawatts to 3.5 gigawatts a year, Vollmer said.

Governors demanded changes to the proposed bill on concern it will hurt local producers such as Solarworld AG as Chinese rivals grab market share. At least four German solar companies including Q-Cells SE, once the world’s biggest cell maker, have filed for creditor protection since December.

“The cut will be drastic but it will still be profitable for homeowners to install panels on their rooftops,” said Harald Will, managing director of Solarinitiative Muenchen, a solar-plant developer in Munich. “That’s a business model that’s already going on and will only improve in the future.”

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