German state premier Seehofer objects to solar cuts

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MUNICH, Germany, March 12 | Fri Mar 12, 2010 12:53pm GMT

MUNICH, Germany, March 12 (Reuters) - Bavaria state premier Horst Seehofer said on Friday that the German government's plans to cut state-mandated solar power incentives are excessive.

Seehofer's Christian Social Union (CSU) is the Bavarian sister party to Chancellor Angela Merkel's Christian Democrats -- and one of three parties in her centre-right coalition.

"The plans presented by the government's cabinet on solar power incentives will have an unacceptable impact on Bavaria," Seehofer said in a statement.

"The cuts the government wants are too high, go in the wrong direction and will needlessly cut the innovation potential."

Merkel's cabinet agreed last week to a proposal to cut state-mandated incentives in July.

The government wants to cut the incentives for rooftop solar power by 16 percent from July 1 and eliminate support for converted farmland. The cuts in the "feed-in tariff" will also include a 15 percent cut for non-agricultural fields.

After passing the cabinet, the measure will head to the Bundestag, or lower house of parliament, where Merkel's centre-right coalition has a majority. But it is unclear what would happen if Seehofer's CSU refuses to back the measure.

So-called feed-in tariffs -- prices utilities are obliged to pay to generators of renewable energy -- are the sector's lifeline as long as grid-parity, the point at which renewables cost the same as fossil fuel-based power, has not been reached.

(Reporting by Jens Hack; writing by Erik Kirschbaum)

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