An executive at AS Solar has strongly criticised the new Germany energy minister’s plans to reform the country’s Renewable Energy Sources Act (EEG), warning that a “total collapse” of the German solar industry can be expected under the new legislation.

Sigmar Gabriel, leader of the SPD, the political party which agreed to form a coalition with Angela Merkel’s Union of Christian Democratic Parties, was appointed head of a new German ‘superministry’ responsible for energy and the economy. His plans to reform the EEG include the controversial levying of a surcharge on self-consumed PV generated electricity, equivalent to 70% of what PV users would have paid if only using power from the grid. According to German industry association BSW Solar, this amounts to the equivalent of around €0.044 per kWh. The reforms will take effect from the beginning of August 2014.

Chief executives of wholesale distributor AS Solar Thomas Rust and Gerd Pommerien are among critics of the reforms. Both argue that self-generated electricity use with storage should be encouraged and promoted.

"If the plans are waved through without drastic changes, we expect a total collapse of the solar industry in Germany, if the proposals of Gabriel and the current government are implemented,” said Rust. The AS Solar executives argued that penalising self-consumption would be equivalent to removing an important supporting “pillar” from the industry.

Gerd Pommerien ridiculed the idea of a charge for self-consumption and said: "What nonsense it would be if you had to pay a levy to farmers for the harvesting of fruit and vegetables from our own garden."

AS Solar warned of further bankruptcies and job losses hitting the industry and the possibility that solar power in Germany could exit the mainstream, returning to being just a niche market.

BSW Solar meanwhile reacted to the news by saying that the surcharge “would have a detrimental impact on the appeal of direct power production, in particular among small and medium sized companies as well as in the agricultural and business sectors at large”. According to BSW Solar, while the association agrees that the cost of Germany’s energy transition (‘Energiewende’) should be more widely distributed, it sees the levying of a surcharge onto fossil fuel producers and users as a better way of facilitating the transformation of the nation’s energy policy.

BSW Solar also alluded to a recent report by the PV GRID project, which offers a range of assessments and recommendations on improvements to grid, in particular to accommodate added renewable energy capacity.

The appointments of Gabriel and his deputy, Rainer Baake, a Green Party member and head of a think tank on energy issues, were originally greeted with cautious optimism by the renewable energy industry.