Friday, July 13, 2012

German Govt, States Agree Solar Incentive Cuts-MPs

Germany's government has agreed with federal states on cuts to incentives for the solar power industry after a weeks-long dispute and a parliamentary mediation committee could approve the deal on Wednesday, participants in the working group said.

Opposition parties and some federal states had in May opposed the plans to slash so-called feed-in tariffs in the upper house, forcing the proposals drawn up by Chancellor Angela Merkel's centre-right coalition to be suspended.

Under the compromise, one-off cuts in incentives of 20 to 30 percent from April are to remain and incentives will be capped for installed capacity of 52 gigawatts. Solar power will still have to be fed into the grid, but at market prices.

In addition, medium-sized plants of 10-40 kilowatts will receive compensation of 18.5 cents per kilowatt hour.

Germany is the world's biggest market for the solar branch but several German firms have been left struggling in the last few months largely due to stiff competition from China and companies have warned against cutting the incentives too dramatically.


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