Oil Report

UPDATE 1-German FDP opposes solar incentive cuts

(Adds more details on FDP objections, background)

BERLIN, Feb 2 (Reuters) - Germany’s Free Democrats, junior coalition partners in Chancellor Angela Merkel’s centre-right government, are opposed to proposals by the Environment Ministry to cut solar power incentives, an FDP lawmaker said on Tuesday.

Michael Kauch, an environment policy expert in the FDP, told the Sueddeutsche Zeitung proposed cuts by Environment Minister Norbert Roettgen were too great and said the proposed cuts would harm the German solar power sector.

“We can’t take an axe to it,” Kauch said, according to an advance of a text to appear in Wednesday’s edition of the paper. He said it would be wrong to cut the incentives by 15 percent as quickly as in April, as Roettgen wants.

Kauch said that in general, cutting excessive incentives is the right approach. But he added cuts should not be so steep as to harm the expansion of Germany’s photovoltaic technology.

Kauch said he was opposed to Roettgen’s plans to cut incentives for larger open-field solar systems by 25 percent and said the FDP is also opposed to introducing the cuts on April 1, as Roettgen has proposed.

Due to the severe winter, many investors will not be able to install systems by that deadline, Kauch said.

So-called feed-in tariffs -- prices utilities are obliged to pay to generators of renewable energy -- are the sector’s lifeline as long as grid-parity, the point at which renewables cost the same as fossil fuel-based power, has not been reached.

SolarWorld SWVG.DE, the country's biggest solar company by sales, and Q-Cells QCEG.DE, one of the world's largest maker of solar cells, have said such cuts would be too steep, too fast and would kill jobs. (Reporting by Erik Kirschbaum; Editing by David Holmes)