* Installations fell 41 percent in first quarter yr/yr
* Rate of expansion slows due to lower support payments
* Build-up in line with allowed target range
FRANKFURT, April 30 (Reuters) - Lower subsidies in Germany cut the installation of solar panels sharply in the first quarter, data from its energy regulator showed on Wednesday.
Installations fell 41 percent to 460 megawatts (MW) compared with the same period a year earlier.
"This development is mainly due to the steady decrease in subsidies," said the Bonn-based Bundesnetzagentur (BnetzA).
The additions in the last three months brought the total of installed capacity to 36.2 GW.
Additions already last year had halved over 2012 to 3.3 GW.
The government over the past two years introduced curbs to feed-in tariffs, as they contributed to sharply higher power prices for consumers who share the subsidy bill.
It also defined a target for annual additions in a 2.5 to 3.5 GW range which, if it is overshot, triggers a sharper fall in the level of payouts. The current sums for the past 12 months are within the corridor, BnetzA said
Germany still has the world's largest installed solar capacity, which was built up thanks to guaranteed payouts for a 20-year period.
The expansion of solar energy has also become a problem for traditional utilities, whose gas and coal plants run for fewer hours as energy from solar and wind parks takes priority when being fed into the power grid.
Solar power contributed 4.5 percent to overall German power supply last year, industry group BDEW has said. (Reporting by Anneli Palmen and Vera Eckert, editing by William Hardy)