(Updated) The German Government is set to backtrack on plans to introduce a feed-in tariff (FiT) cut on July 1 because of disappointing new installation figures in the first half of the year, reports Reuters. Between March and May just 700MW of new solar capacity was installed and Government officials fear a mid-year subsidy reduction will do little to revive the industry’s flagging fortunes.

System installations for the March to May period will set the projections for the whole year, and the industry’s failure to meet or exceed 3.5GW means that the flexible part of the annual gradual decrease will not be activated on July 1. Consequently the FiT will not be subjected to the anticipated 15% cut.

However, while solar looks set to dodge one FiT targeted bullet, the business arm of Angela Merkel’s Christian Democratic Union is reloading the barrel with another; Union members are calling for a ceiling to be placed on country’s PV market and Joachim Pfeiffer and Michael Fuchs have already written a letter to the Union head lobbying for an annual 1GW cap.