Germany poised to approve solar incentive cuts

The long-running saga surrounding proposed reforms to incentives in two of Europe's largest solar energy markets appears to be nearing its dénouement, after reports yesterday from Germany and Italy suggested announcements on the two countries' feed-in tariff schemes are imminent.

A German government source told Reuters yesterday that the cabinet had, as expected, approved proposed cuts of 16 per cent to solar power incentives.

The cuts, which are expected to be approved in the German parliament later this month, will come into effect from the start of July.

A smaller cut of 11 per cent in the incentives for solar installations on so-called conversion sites such as disused army bases and landfill sites will also come into effect on the same date, while incentives for solar panels deployed on converted farmland will be removed altogether. Installations on non-agricultural fields will reportedly face a tariff cut of 15 per cent.

The cuts, which are being pursued by the government in an attempt to track the falling price of solar panels in the German market, are less severe than original proposals for a larger reduction in incentives for rooftop solar panels that would have come into effect from last month.

However, a number of solar firms have expressed fears that the changes will slow the sector's recovery and undermine one of Europe's most vibrant renewable energy markets.

Meanwhile, Italian industry minister Claudio Scajola hinted yesterday that he would present a long-awaited solar incentive scheme at a meeting later today.

The Italian government is expected to mirror its German counterpart and cut feed-in tariffs for solar power in line with falling costs across the sector. However, the plan has been repeatedly delayed as a result of regional elections later this month.

Solar firms operating in Italy have become increasingly concerned about the lack of clarity surrounding the new scheme, particularly given the current incentive scheme is set to expire when installed capacity, currently in excess of 1,000MW, reaches 1,200MW.