June 16, 2010 / 4:04 PM / in 7 years

UPDATE 2-Spain wants sharp subsidy cut for solar plants

* Lobby says Spain wants 30 pct cut for operating plants

* Wants to cut subsidies for future plants by 25-45 pct

* Industry lobby says cuts would mortally wound sector

(Adds detail on timings of cuts, further comment)

By Jonathan Gleave

MADRID, June 16 (Reuters) - The Spanish government is proposing sharp cuts in subsidies for solar plants, which could hurt both domestic and international solar companies operating in the country, industry lobbyists said on Wednesday.

Spain wants to cut existing solar panel plants’ subsidies by 30 percent and future ones by 45 percent for big floor-mounted units and 25 percent for smaller roof mounted ones, Spanish solar power lobby ASIF spokesman Tomas Diaz said.

“This (proposal) would destroy the government’s renewables-friendly policy and kill us all off,” Diaz said after solar lobby groups met with Spain’s Secretary of State for Energy Pedro Marin.

“We don’t think the sector can survive if it accepts these proposals,” Diaz said.

An Industry Ministry spokesman declined to comment on the proposed subsidy cuts.

In an effort to reduce a huge deficit between the real cost of producing power and the subsidised price consumers pay for it, the government is working out a new renewables subsidy scheme, which is expected before the end of the month.

Solar power, which had exponential growth in 2008 that has already led to cuts in subsidies and caps on future development, is largely expected to be the hardest hit by the subsidy reductions.

The solar subsidy cuts would likely be introduced before October, though the government wants to introduce them immediately and has given the sector two days to decide how cuts for existing plants should be applied, the spokesman said.

“It’s like asking someone condemned to death whether whey want the electric chair or a lethal injection,” he said.

Spain’s larger windpower sector is also meeting with the industry ministry this evening for ongoing talks on its own subsidy review, a spokeswoman for sector lobby AEE said, but declined to comment on the government proposals until talks have ended. (Editing by Alison Birrane and James Jukwey)

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