WRAPUP 1-German solars brace for lower tariffs, independence

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Mon Sep 21, 2009 12:45pm EDT

* Feed-in tariffs should be lowered faster -SolarWorld CEO

* Cut bound to environmental standards for players worldwide

* Lower subsidies would lower sector's dependence

(Wraps conference, adds quotes, details)

By Christoph Steitz and Anneli Palmen

HAMBURG, Sept 21 (Reuters) - German solar companies warmed to the idea of lower domestic subsidies in a move that would take the country's industry one step closer to becoming economically independent.

"The speed of the drop (in subsidies) should be increased," SolarWorld (SWVG.DE) Chief Executive Frank Asbeck told a news conference in Hamburg during the European Photovoltaic Solar Energy Conference on Monday, kicking off the long-awaited debate on the topic.

Germany, forecast to become the world's biggest solar market in 2009, has seen its solar industry grow at rapid rates due to feed-in tariffs -- incentives that utilities are obliged to pay to companies generating power from renewable sources.

Under the German Renewable Act, feed-in tariffs are set to decline by 8-10 percent next year to slowly force the industry to make production more efficient and reduce costs on its way to grid parity -- the point at which renewables cost the same as fossil fuel-based forms of power generation.

SolarWorld's Asbeck said that a drop next year of 10-15 percent was possible if the Renewable Act formulated environmental and quality standards that also applied to U.S. and Asian players operating in Germany.

The solar industry has been hit by falling prices for cells and modules, the main components needed for the production of photovoltaic systems, and companies have seen their once massive margins drop rapidly.

In comments to Reuters that echo Asbeck's remarks, the chief executive of solar equipment maker Manz Automation (M5ZG.DE), Dieter Manz, said: "The industry needs those feed-in tariffs, but not to such an extent."

Uwe Boegershausen, the finance chief of German module maker Aleo Solar (AS1Gn.DE), also said the company had further savings potential and could shoulder a higher drop in feed-in tariffs. (Reporting by Christoph Steitz and Anneli Palmen; Editing by Jon Loades-Carter)

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