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26th Aug 2016

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Germany to cut solar energy subsidies

  • Germany to cut solar energy subsidy and channel some of the funds to wind energy (Photo: Brookhaven National Laboratory)

Germany's solar power industry could cool as Berlin plans to cut subsidies in a sector whose energy capacity output has more than doubled the government’s projected target.

German authorities want to slash up to 30 percent of the industry’s subsidies they claim is increasing the surcharge paid by consumers and taking funding away from other renewable energy sectors like wind.

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Environment Minister Norbert Roettgen and Economy Minister Philipp Roesler will present their plans on the cuts on Thursday (23 February) around noon.

Despite last year’s subsidy cuts, around 7.5 gigawatts (GW) of solar panels, the equivalent of six nuclear power stations, were installed in December alone resulting in €8 billion of state funding to the industry. A policy that guarantees a fixed price for the next twenty years helped entice investors to construct the photovoltaic stations.

Germany wants to reduce yearly installations down to a solar energy output between 2.5 GW to 3.5 GW. The aim is to reach 66 GW by 2030 and completely phase out its dependence on nuclear energy by 2022.

Currently at 25 GW, Germany has the world’s largest solar power capacity yet only generates around 3 percent of its electricity. The OECD says total renewable energy subsidies in Denmark are about half of Germany's yet it generates 30 percent of Danish electricity as opposed to 20 percent in Germany.

Germany’s solar energy industry claims the cuts and China’s rising competition could provoke layoffs among the 120,000 who work in the sector.

"Further drastic cuts in support for solar power are not viable. In addition, they endanger Germany’s access to one of the world’s largest future-oriented markets and pose a real risk to the transformation of the energy system as well as to over 100,000 jobs in Germany," said a statement made by the German Solar Industry Association in January.

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