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Germany Scraps Solar Energy Subsidy Cut as Merkel Exits Nuclear

By Nicholas Comfort and Rainer Buergin - Jun 6, 2011 8:55 AM ET

Germany scrapped a planned cut in subsidies paid to solar panel owners as Europe’s biggest electricity market seeks to exit nuclear power, according to a draft law published on the Environment Ministry’s website.

“There are no significant changes for electricity from photovoltaic facilities from those made in 2010,” reads the document, which details scheduled cuts in above-market rates paid to solar panel owners. Environment Minister Norbert Roettgen has said he considered an additional reduction in March next year.

Germany, which uses nuclear for 23 percent of its power, plans to switch to renewable energy output after Japan’s reactor disaster stoked safety concerns. The government is balancing aid for energy from solar panels and wind turbines with the associated cost for citizens and industrial users, who finance the technology’s roll-out through their power bills.

“There is no change of mind,” Roettgen said today in Berlin. “We’re having a discussion about how the degression, which is possible because of technological and market developments in solar, is technically implemented in the law.”

This can be done with one-time reductions, by increasing cuts or by forecasting the installation of technology and the scaling back of subsidies in half-year steps on Jan. 1 and July 1 each year, rather than Jan. 1 of the following year, he said.

The minister told reporters on May 30 that he considered a 6 percent aid cut in March 2012 that would come on top of reductions of as much as 24 percent between July and next January to adapt the subsidy to falling panel prices.

To contact the reporter on this story: Nicholas Comfort in Frankfurt at [e-mail] Rainer Buergin in Berlin at [e-mail]