German solar industry faces subsidy cut: minister

Yahoo News 19 Jan 10;

BERLIN (AFP) – Germany, the world's biggest market for solar cells, is poised to slash its subsidies for solar power by as much as 17 percent, Economy Minister Rainer Bruederle said on Tuesday.

"I envisage an order of magnitude of 16 to 17 percent," Bruederle said at an energy conference in Berlin.

Electricity produced by solar power in Germany is sold at a minimum price guaranteed by the government to help producers compete with firms using fossil fuels and nuclear power that can produce power much more cheaply.

This guaranteed price has already been reduced gradually -- the subsidy was already cut by 10 percent from January 1 this year -- but pressure has grown on the government to accelerate the process.

Experts say the subsidy fails to spur competition in the industry, which represents less than one percent of the total electricity production in Germany, Europe's top economy.

The solar sector itself has said it is prepared to accept a cut in the subsidy, but that anything above 10 percent would be intolerable.

After years of dazzling results, Germany's solar industry has succumbed to the gloom enveloping the broader economy, with competition from Asia also taking the shine off the sector.

The world's top solar cell maker, Q-Cells, saw its turnover plunge by over 40 percent in the first nine months of 2009.

German Minister In Favor Of Slashing Solar Tariffs
Christoph Steitz, PlanetArk 20 Jan 10;

BERLIN - Slashing feed-in tariffs for the solar industry by 16-17 percent is feasible, German Economy Minister Rainer Bruederle said on Tuesday, dealing a blow to the sector which is still hoping for smaller cuts.

"Regarding the photovoltaic (industry), cuts of 16-17 percent can be made. This is my opinion, this is not yet the position of the government," Bruederle said.

Shares in German solar companies extended losses on the news, with Q-Cells, SolarWorld, Conergy, SMA Solar and Phoenix Solar down 1.2-3.8 percent by 1024 GMT.

The OekoDAX, a composite of Germany's biggest renewable companies, fell 2.5 percent.

"It looks as if there really will be a cut in tariffs and investors are nervous," said a Frankfurt-based trader.

Bruederle's comments came less than a week after Reuters cited sources as saying that such cuts were envisaged for April, sending solar stocks around the globe lower on fears that demand in Germany -- the world's biggest solar market -- would fall.

Markets have been awaiting plans by the German government to cut the industry's feed-in tariffs -- prices utilities pay generators of renewable energy -- which are now considered as being too high, but so far hoped for cuts of about 5-10 percent.

A double-digit reduction in solar feed-in tariffs in the middle of 2010 would ruin many German firms and end Germany's worldwide leadership in solar technology, Germany's BSW solar industry association said on Friday.

Investors' appetite for shares in the once fast growing solar sector has been curbed already by oversupply of cells and modules as well as tight credit conditions, which have thrown the sector into a prolonged crisis.

(Editing by Jon Loades-Carter)