* Bundesrat upper house set to block solar incentive cuts
* Shares in German solar firms rise
(Adds background, details)
By Markus Wacket
BERLIN, June 3 Germany's Bundesrat upper house
of parliament is unlikely to pass cuts to solar incentives on
Friday, so a mediation committee would be needed to resolve the
matter, government sources told Reuters on Thursday.
If the parliamentary committee is called, the proposed cuts,
which include a 16 percent reduction in so-called feed-in
tariffs for new rooftop solar installations, would not be able
to take effect on July 1 as planned, the sources said.
The impasse has arisen because states in eastern Germany,
along with the big western states of Baden-Wuerttemberg and
Bavaria, where the solar industry is strong and provides
thousands of jobs, have decided to block approval, sources said.
The Bundesrat, which represents Germany's 16 states, is due
to vote on the planned changes on Friday.
The cuts, which have been passed by the Bundestag lower
house, could still be applied retroactively, the sources said.
Stocks in German solar firms such as Q-Cells QCEG.DE and
Solarworld SWVG.DE were up on Thursday, outperforming a rise
in the DAX .GDAXI share index.
Other changes planned by Chancellor Angela Merkel's
centre-right coalition were a 15 percent cut in support for most
open-field solar installations. Support for farmland solar
systems is due to be scrapped entirely.
Furthermore, cuts of 1 percentage point in addition to those
set out in the German renewable energy act (EEG) would be made
by the beginning of 2011, if newly installed capacity exceeded
3.5 gigawatts within a year.
(Writing by Dave Graham, editing by Will Waterman)