January 27, 2011 / 12:12 PM / 9 years ago

German ministry says no plans for solar power cap

BERLIN, Jan 27 (Reuters) - Germany’s Environment Ministry said on Thursday it had no plans to put a cap on solar power incentives after a panel of advisers recommended introducing a ceiling once new capacity reaches 1 gigawatt in a given year.

A spokesman for the ministry in Berlin said it had announced its own plans just a week ago to lower incentives this year. He said that Environment Minister Norbert Roettgen had expressly said there would be no cap on incentives.

“We already presented our proposals last week,” the spokesman said, adding that would remain its position.

Roettgen announced last week plans to bring forward solar power subsidy cuts by six months to July 1. The cuts could be as much as 15 percent if projections at the end of May suggest more than 7.5 gigawatts in new capacity will be installed in 2011.

German officials say they do not want to harm the fast-growing sector. Caps on subsidies devastated the sector in other countries and Germany wants to avoid that, officials said.

Europe’s largest economy is the world’s biggest market for photovoltaic, which turns sunlight into electricity, helping drive down the prices for photovoltaic systems.

The industry boomed after the Renewable Energy Act (EEG) in 2000, which guarantees investors above-market fees for solar power for 20 years.

The panel advising the ministry presented its report on Wednesday, urging a cap on incentives for photovoltaic energy once added capacity hit the 1 gigawatt (GW) mark in any year.

The German solar power association (BSW) lobby group warned a cap would devastate the sector and endanger 130,000 jobs.

The SRU panel of experts said in its report the photovoltaic sector in Germany was growing too fast.

Germany added 7 GW in a record-breaking year in 2010 to bring the total to nearly 17 GW, equal to 17 large power plants.

In 2010 German incentives for renewables — about half of which was for solar power — totalled about 13 billion euros ($17.5 billion).

The tariffs will be cut by a further 9 percentage points in January 2012, as already scheduled.

Utilities are obliged to pay higher rates per kilowatt hour of electricity produced for 20 years. (Writing by Erik Kirschbaum; Editing by Jon Loades-Carter)

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