* Output in Calendar Year rises to 18 billion kWh
* Industry lobby says production costs have fallen
* Intends to pursue growth course despite subsidy cuts
FRANKFURT, Dec 29 (Reuters) - German solar power producers raised electricity output in 2011 by 60 percent over 2010 to 18 billion kilowatt hours, grabbing more than 3 percent of total power output volumes, its lobby group Bundesverband Solarwirtschaft (BSW) said on Thursday.
The sector already produced enough power to supply some 5.1 million households, one eighth of all households or the entire state of Thuriniga, BSW said.
“Solar energy has become an indispensable ingredient of a successful energy strategy shift,” Managing Director Carsten Koernig said in a statement.
Power from photovoltaic (PV) installations was the fastest growing segment within all German power derived from renewable sources in 2011, energy association BDEW data shows.
So-called green power in 2011 captured 19.9 percent of the power mix, compared with 16.4 percent in 2010, it said in preliminary data earlier this month, without giving production totals.
Within the fifth of total power supply accounted for by renewables, solar raised its share to 3.2 percent from 1.9 percent year-on-year, the BDEW figures showed.
Despite the production gains, the solar industry has to concede that such production is volatile and unsustainable under unfavourable weather conditions, and that the sector is still subsidy-driven, experts say.
This makes its part in helping turn Germany away from oil, gas and coal in favour of green power costly to consumers.
But Koernig said costs have been halved since 2007 and a pro rata cut in subsidies since then has been absorbed.
“The solar industry stands by its commitment to cut costs radically,” Koernig said.
Feed-in tariffs paid to producers will fall by 15 percent on Jan. 1, 2012 and by another 9 percent in mid-2012 as the government aims to force the industry to lower its costs faster, a move that has hurt leading companies such as Conergy and Solon.
The guaranteed tariffs, which must be borne by all consumers, were cut by 13 percent on Jan. 1, 2011, amid an explosion in new panel installations, which has now slowed.
BSW said if there were reliable conditions, the industry would continue with targets to supply 10 percent of all power by 2020. (Reporting by Vera Eckert; editing by James Jukwey)