German opposition backs new cuts for solar power aid

BERLIN (Reuters) - Germany’s main center-left opposition parties have backed calls to make further cuts in support for new solar power installations, which may help the government to bring forward reductions in aid.

Both the environmentalist Greens and Social Democrats (SPD), who enacted legislation under ex-chancellor Gerhard Schroeder that created the basis for a boom in solar investment, said they were open to paring back assistance the industry receives.

“In view of recent developments, a measured reduction in allowances for photovoltaics is definitely possible,” said Baerbel Hohn, deputy head of the Greens in parliament.

The SPD is also open to the option of cutting back support, according to internal papers seen by Reuters on Tuesday.

Germany’s Environment Ministry welcomed the news.

“The market development renders further cuts possible,” a spokeswoman for the ministry said.

Support from the Greens and SPD could hasten the passage of any legislation to bring about cuts in the Bundesrat upper house of parliament, where Chancellor Angela Merkel’s center-right ruling coalition no longer has a majority.

Last week, the BSW solar industry association lobby said it would constructively support considerations to move forward some solar support cuts to mid-2011 from 2012.

Planned cuts have spurred a boom in investment in the industry and Germany will add a record of some 8 gigawatt (GW) of photovoltaic capacity this year to a total of nearly 18 GW.

Germany is the world’s biggest market for photovoltaic, which turns sunlight into electricity. The industry boomed with the Renewable Energy Act (EEG) in 2000, that guarantees investors above-market fees for solar power for 20 years.

Utilities in Germany are obliged to pay higher rates per kilowatt hour of electricity produced for 20 years. That rate had been falling by about 8 to 10 percent per year before dropping an extra 16 percent in July.

Reporting by Markus Wacket; editing by James Jukwey