Greece cuts subsidies for solar power producers
* Greece reduces solar power subsidies from February
* Subsidies to gradually fall by 22 pct by 2014
* Cuts will not apply to units already on line
ATHENS, Feb 1 (Reuters) - Cash-strapped Greece cut its subsidies for solar power producers on Wednesday, saying it could no longer afford to pay the current rates and that it had already licensed all the units it needs to meet its renewable energy targets.
The windswept and sun-soaked country has been trying to attract renewable energy investment by offering 20-year supply contracts at generous, guaranteed prices.
In an effort to lift its ailing economy out of the doldrums, Athens has even presented plans to become Europe's solar energy powerhouse, attracting up to 20 billion euros ($26.2 billion) in investment in the decades to come.
Like other European countries in recent months, however, Greece has been forced to cut subsidies to cope with a government budget squeeze and avoid oversupply in the sector.
"In today's difficult economic environment, it is necessary to ensure the viability of the financing mechanism in order to secure the operation of the units already installed and to develop new ones," the energy ministry said in a statement.
The new so-called "feed-in" tariffs apply to all solar power producers coming online from February. Those generating more than 100 kilowatts will see their subsidies cut by 12.5 percent to 292.08 euros per megawatt hour (MWh). The rate will then drop every six months to hit 203.20 euros/MWh by August 2014.
Renewables, mostly wind, currently cover about 7 percent of total power demand in Greece, against 46 percent for coal and 8 percent for oil. But the number of solar panels in the country has been growing rapidly from an installed 198 MW in 2010 to an estimated 580 MW at the end of last year.
Based on the number of projects already licensed, Greece will easily meet its target to produce 1,500 MW from solar panels in 2014, the ministry said on Wednesday.
State-controlled power producer PPC, which relies heavily on coal and is one of Europe's biggest polluters, plans to build one of the world's biggest solar parks with a total installed capacity of 200 MW.
In a move to boost the financing of green power producers, Greece in December slapped a charge on PPC's coal-generated electricity.
($1 = 0.7639 euros) (Reporting by Harry Papachristou, editing by Jane Baird)