Germany’s solar industry has warned that proposed changes to the country’s renewable energy support could damage its standing in the sector and block one route to secure, low-cost energy.

Bundesverband Solarwirtschaft (BSW-Solar) claimed in an open letter to Chancellor Angela Merkel, that a proposed charge for self-consumption could lead to “another photovoltaic market slump”. A proposed cap on PV installations of 2.5GW has also emerged.

BSW-Solar agrees with the need to phase-out the support provided by the Energiewende (EEG) policies, it said the levy on self-consumed solar would have the opposite effect.

“The implementation of an eco-tax on self or community consumed green electricity would… [mean] the dependence on the EEG support would increase again. The energy transition costs would thus not fall in the coming years, but rise. This may not be in the interest of politics,” the group noted.

New "super minister", Sigmar Gabriel, head of the new junior coalition partner the SPD, has responsibility for both energy and the economy.

In his first major policy speech, he said the current subsidy regime was no longer sustainable.

“The energy transformation has the potential to be an economic success, but it can also cause a dramatic de-industrialisation of our country,” he told a conference.

"We have reached the limit of what we can ask of our economy," he claimed.

A document leaked to the press reportedly showed that the government is keen to establish an annual cap on new annual installed PV capacity of 2.5GW with the same limit attached to onshore wind.

BSW-Solar estimates that the country installed 3.3GW in 2013 and 7.6GW in 2012.

Changes to the EEG must be approved by the cabinet by 9 April for passage through parliament during the summer.