Germany to cut solar subsidies faster than expected
* Germany to reduce incentives 20-30 pct from March 9
* March 9 date not yet fixed, could be April 1 -minister
* Sector shares fall on the news
(Adds details, background, shares)
By Erik Kirschbaum and Christoph Steitz
BERLIN/FRANKFURT, Feb 23 (Reuters) - Germany aims to reduce solar power incentives by between 20 percent and 30 percent from March 9, rather than from April 1, which is what had been expected, spelling further trouble for companies selling panels in the world's No.2 photovoltaic market.
Shares in European solar companies fell on the news, with sector bellwethers SolarWorld (SWVG.DE), SMA Solar (S92G.DE), Q-Cells QCEG.DE, Renewable Energy Corp (REC) (REC.OL) and Centrotherm CTNG.DE down by between 3.2 and 8.3 percent by 1248 GMT.
U.S.-based First Solar (FSLR.O) and China's Suntech STP.N were down 1.6 (FSLR.F) and 2.1 percent (S9Hy.F), respectively, in thin trading on the Frankfurt stock exchange ahead of Wall Street's opening bell.
The German government will cut incentives to 19.5 cents per kilowatt hour for small plants, to 16.5 cents for plants up to 1,000 kilowatts (KW) and to 13.5 cents for plants of up to 10 megawatts (MW), the Economy and Environment ministries said in a joint statement on Thursday.
The incentives were already cut by 15 percent on Jan. 1 to 24.43 cents for small plants up to 30 kw. Germany gets about 20 percent of its electricity from renewable energy and nearly 4 percent from 1 million photovoltaic producers, who typically generate power through solar panels.
"All German solar stocks are likely to suffer," Silvia Quandt analyst Sebastian Zank said. "We only recommend selected companies which have chances to defend business volumes due to their already existing or future international footprints."
The acceleration of cuts in state-mandated photovoltaic incentives follows a record-breaking expansion of solar power in 2011. Germany is the world's leader in solar power with about 25,000 MW of installed capacity. But in terms of new annual installations, it was overtaken by Italy last year. [ID:nL5E8CP2EU]
German Environment Minister Norbert Roettgen confirmed on Thursday there would be no more solar power incentives for plants of over 10 megawatts.
Roettgen added the German cabinet would receive the draft for the cuts next week and that the March 9 target was not yet fixed, adding it could also be April 1 depending on how quickly it passes through the cabinet and parliament.
Installations of solar panels have boomed in Germany over the last two years due to feed-in tariffs, generous subsidies utilities are forced to pay by the government to those who generate their own solar power that is pumped into the grid. Ultimately power companies pass on the costs to their customers.
But as the burden on energy consumers soars, the German government wants to tighten its grip on the market and is scrambling for ideas over how best to curtail demand.
((Madeline.Chambers@thomsonreuters.com)(+49302885230)(Reuters Messaging: email@example.com)) Keywords: GERMANY SOLAR/INCENTIVES
(C) Reuters 2012 All rights reserved. Republication or redistribution of Reuters content, including by caching, framing, or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
- Tweet this
- Share this
- Digg this