Germany Cuts Solar Subsidies
Germany's lower house of parliament officially approved significant cuts to the government subsidies for solar power on Thursday. Industry experts claim the German Renewable Energy Act passed in 2008 -- whose goal is to have the country attain 30 percent of electrical power from sustainable resources by 2020 -- has inadvertently caused an oversupply of solar equipment causing prices on solar cells to drop by up to 50 percent as a result. All government support for farmland solar stations will cease, and there will be a 15 percent reduction of government subsidies for open-field installations by 2011.
According to Norbert Roettgen, Germany's Environment Minister, the decision was made to "keep the costs with which we burden electricity clients under control." Citizen's electric bills have been increased monthly by three percent the past 2 years to subsidize renewable energy.
Roettgen explained that since Germany already produces about half of the world's solar energy, competition with the Asian solar market on technology and innovation is crucial. The cut in incentives should inspire "innovation instead of subsidies." Companies which rely on government subsidies, like SolarWorld and Phoenix Solar, will be affected most by the cuts in funding.