BERLIN (Reuters) - Germany's ruling conservatives on Thursday unveiled a plan to cut subsidies for solar energy by 30 percent in 2009, casting a cloud over the future of an industry which has grown into a world leader.
By Thorsten Severin
BERLIN (Reuters) - Germany's ruling conservatives on Thursday unveiled a plan to cut subsidies for solar energy by 30 percent in 2009, casting a cloud over the future of an industry which has grown into a world leader.
Michael Fuchs, head of a parliamentary panel on small and medium-sized companies in Chancellor Angela Merkel's conservatives, told reporters the proposal had been agreed with conservative policymakers on the environment.
"We definitely want this 30 percent reduction," he said, adding the move needed to be discussed with the Social Democrats (SPD), who rule in coalition with Merkel's conservatives in an often fractious coalition.
!ADVERTISEMENT!German law requires utilities pay solar energy producers higher prices for solar power they put into the grid. But the government says the industry can live with less support and wants to redirect help to other types of renewable energy.
Solar industry companies responded to the measures outlined by Fuchs with dismay.
"A 30 percent reduction would definitely cost 40,000 jobs and our leadership position in this technology," said Frank Asbeck, chief executive of Bonn-based SolarWorld AG.
Solar cell maker Q-Cells AG was even more downbeat. "The German market would be dead and the industry would be dead," the eastern German firm said in a statement.
Shares in both companies fell more than 5 percent.
According to the conservative proposal, further cuts should be made of 8 percent in 2010, 9 percent in 2011 and 10 percent in 2012, which would go much further than those targeted by SPD Environment Minister Sigmar Gabriel.
The SPD wants to reduce support by 7 percent in 2009, 9 percent in 2010 and 8 percent in 2011.
Sources close to the SPD said a negotiating paper put forward by the conservatives contained no figures.
Disputes over the issue have raged between conservative industry and environmental lawmakers in Germany where the rooftop photovoltaic industry has boomed in recent years.
More than half the world's photovoltaic energy is produced here, much of it from the 300,000 systems on rooftops in the often cloud-covered country.
A 2000 renewable energy law (EEG) sparked the boom, a law which has since been copied in more than a dozen EU countries.
Among other things, it requires utilities to pay households with rooftop solar systems more than double market rates for their power. The feed-in tariffs are locked in for 20 years.
Some conservatives in eastern Germany, where a large slice of the solar power industry is based, have also warned against making too deep cuts in subsidies.
(Additional reporting by Anneli Palmen; Writing by Dave Graham; Editing by Greg Mahlich and David Holmes)
