NCPA - National Center for Policy Analysis

Germany Vows to Quicken Solar Power Subsidy Cuts

January 24, 2012

Solar stocks plunged around the world after Germany, the largest market for panels, said it will make quicker cuts to subsidized rates and phase out support for the industry by 2017, reports Bloomberg.

  • German Environment Minister Norbert Roettgen said last week that he planned to reduce feed-in tariffs providing above-market prices for solar power every month instead of twice a year as he does now.
  • He said he's working to curb an "unacceptable" surge in installations last year.
  • Yesterday's decision indicated ministers are speeding up efforts to restrain the boom in installations after developers added 7.5 gigawatts of panels last year, surpassing the 3 gigawatts that Roettgen said would be acceptable.

A slowdown in the German and Italian markets, which accounted for about half of worldwide installations last year, is bound to hurt the industry.  Germany targets 2.5 to 3.5 gigawatts a year and seeks to phase out subsidies by 2017, Roettgen said.

The country was expected to cut tariffs by 15 percent in July, following a 15 percent reduction that took effect Jan. 1.  Under the current law, lower rates are imposed automatically by above-target installations.

Source: "Solar Stocks Plunge as Germany Vows to Quicken Subsidy Cuts," Bloomberg, January 20, 2012.

For text:


Browse more articles on Environment Issues