The Bundestag, Germany’s lower house of parliament, has approved the cut in solar power subsidies to take effect July 1. Under the proposed law, feed-in tariff rates offered for rooftop solar units could be slashed by 16% while the incentives for most open-field, ground-mounted installations face a 15% cut. The planned changes are in addition to initial cuts announced earlier this year, reports Reuters.
German Environment Minister Norbert Roettgen said that the cuts were necessary since solar module prices have dropped significantly in recent months, introducing strong competition from Asian manufacturers. This change will encourage a more competitive solar market in Germany, Roettgen argues. “Our solution is innovation instead of subsidies…and we also have to keep the costs with which we burden electricity clients under control.”
If passed, the law will allow other subsidies to continue to be extended. From January 2011, subsidy cuts can be increased by 2.5% if additional solar energy units with a capacity of over 3,500MW are added to existing units. From 2012, the cuts can be extended by 3%.
Critics of the cuts say that they could damage the photovoltaics industry in Germany by slowing the development of the technology.
The Bundestag approved the measure by a vote of 313 to 66, with one parliamentarian abstaining. The law still needs to be considered by the upper house.