Germany’s new EEG draft contains extra solar subsidy cuts

In a public expert hearing on Wednesday the Environmental Committee of the Lower House of Parliament will deal with the Renewable Energy Act [EEG] amendment.

It is now there in black and white: additional cuts in solar subsidies are contained as a new item in the revised draft of the amendment to the Renewable Energy Act.

Accordingly, the photovoltaic feed-in tariffs will not only drop by up to 24 percent altogether at midyear and from January 1, but will be lowered again "by a one-time amount of six percent" on March 1, 2012, as indicated in the draft. A reduction in solar subsidies will then again follow in mid-2012.

This additional cut in solar subsidies found its way into the amendment of the EEG in the course of departmental approval involving the German Federal Ministry of Economics and Technology, as well as the German Federal Ministry of Finance among others.

The additional cut was not provided for in the original draft from German Federal Minister for the Environment, Nature Conservation and Nuclear Safety Norbert Röttgen (CDU). The Federal Cabinet plans to adopt the EEG draft next Monday. The Environmental Committee will then hear experts with regard to the topic in a public meeting on Wednesday.

The German Solar Industry Association (BSW-Solar) turned to German Federal Chancellor Angela Merkel (CDU) in an open letter in which the association appealed to Merkel to prevent further cuts in the solar subsidies: "The government decided on new cuts of up to 24 percent per year for solar electricity just in March," it says in the letter.

"There is no latitude for an additional six percent degression – uncoupled from market growth – as provided for in the current bill." Approximately 30 companies in the photovoltaic industry signed the letter.

Additionally, based on current installation figures, the BMU (the Bundesministeriums für Umwelt, Naturschutz und Reaktorsicherheit) believes that starting from July 1, 2011, a FIT degression of six percent will come into play.