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Germany: Unscheduled cuts to solar FIT scheme dropped

Additional cuts to photovoltaic feed-in tariffs (FIT), which were to come into effect as of March 2012, have been struck from the draft of amendments to the Renewable Energy Act (EEG), according to media reports. The German Federal Cabinet adopted the draft today (Monday).

Unschedule six percent cuts to German FIT photovoltaic scheme, off the table. Image: Solarpraxis AG/Andreas Schlegel.

Government plans to additionally cut incentives for photovoltaic energy have been removed from slated amendments to the Renewable Energy Act (EEG). Previous statements from the Ministry for the Environment, Nature Conservation and Nuclear Safety had indicated an unscheduled six percent cut to the FIT incentives to take effect in March 2012.

However, the announced cuts have purportedly been removed from the draft of the EEG amendments. This was reported by the Reuters news agency. Apparently the German federal government now aims to retain the original mechanism for revising down the FIT scheme, that it calls a "breathing ceiling." Accordingly, FIT incentives for photovoltaic plants will be cut by up to 24 percent, dependent on the annual number of additional installations.

While a decision by the German Federal Network Agency as to the scale of the downward revision is yet to be announced, some predictions are that the final scheduled reduction will amount to a nine percent cut on July 1, followed by another on January 1, 2010.

Just last week German Federal Minister for the Environment, Nature Conservation and Nuclear Safety Norbert Röttgen, announced that solar subsidies were to be cut by a further six percent as of March 1, 2012. This reduction had found its way into amendments to the EEG during the departmental approval process. However, reports are that Chancellor Angela Merkel gave a free hand to members of the ruling coalition parties during consultation, and the unscheduled six percent cuts were removed.

This morning the Cabinet of the German federal government discussed and approved the EEG amendments, at the same time deciding to abandon nuclear energy. The result is a phased shutdown of nuclear power plants in Germany by the year 2022.

On Wednesday, the Environmental Committee of the Lower House of Parliament will discuss the amendments to the Renewable Energy Act (EEG). Experts on the topic will then be heard during the public meeting. The law will then be discussed in the Lower House of Parliament and – according to government plans – is to be adopted even before the summer parliamentary recess. Approval by the Upper House of Parliament is not required for the EEG amendments.