* Cabinet gives go ahead to decree -govt source
* Environment, industry ministers reached deal this week
* Investors had complained of delays to final approval
(Adds detail, background)
ROME, May 5 (Reuters) - Italy has approved a draft decree which caps spending on generous solar power incentives at a cabinet meeting on Thursday, a government source told Reuters.
The environment and industry ministers reached a deal this week after disagreements slowed down the signing of the decree, which has been in the works over the last couple of months.
Italy’s solar market, the world’s second largest after Germany, has boomed since 2007, when the government boosted production subsidies. But Italy decided to cut incentives this summer to ease the burden on consumers, who support the scheme through power bills.
Delays in finalising the new incentive scheme, originally due to be approved by the end of April, have raised investor concerns about their strategy in Italy and weighed on shares of major global solar companies.
According to the draft decree seen by Reuters on Tuesday, the government has tightened the planned cap on the money it intends to spend for solar power incentives from June this year to the end of 2012, compared with an earlier draft.
Italy’s booming solar sector has attracted the world’s biggest photovoltaic module makers such as China’s Suntech Power Holdings Co, Trina, Yingli Green Energy and U.S. firm First Solar. (Reporting by Alberto Sisto; Editing by Jon Loades-Carter)