Chancellor Angela Merkel's coalition in the lower house of parliament in Berlin today approved trimming the fixed price paid to most solar generators by 10 percent and reduce aid for offshore wind power after 2015. Last year the guaranteed price paid for solar-produced electricity was reduced by 5 percent.
Europe's largest power market is altering its renewable- energy law to spur the industry to control expenses and improve efficiency. Almost nine years of subsidized prices have spawned the world's biggest market for photovoltaic panels and created the largest exporter of equipment for wind energy. Renewable- energy companies were pleased the reductions weren't worse.
``We assess the new law as positive and it will spur new investment,'' said Bjoern Klusmann, who heads the Berlin-based BEE renewable energy lobby group, in an interview. ``The cuts to solar are not as deep as we expected, but still mean that the industry will have to take considerable steps to adjust.''
Some lawmakers had demanded a cut of as much as 30 percent in the subsidized rate. The law will help support new investment in the industry, said a group that represents the sector. The so-called feed-in tariffs, a concept pioneered in Germany, oblige utilities to buy renewable energy from a range of producers, from households with solar panels to entrepreneurs who built small plants to benefit from price guarantees.
Three-Year Horizon
For solar energy, the price will decline between 8 percent and 10 percent annually over the next three years, for equipment generating less than 1 megawatt of electricity, or supplies for less than 2,000 average European homes. The law also creates a new level of prices for generating more than 1 megawatt of power that starts with a fixed tariff of 33 euro cents, or about 25 percent less than under the previous regime.
The guaranteed price ranges between 33 cents and 43 cents a kilowatt-hour, or the amount to power a vacuum cleaner for about 60 minutes, from a previous maximum of 47 cents.
``Only with massive efforts in research and development and considerable investment in new, highly modern facilities can we reach the ambitious targets politicians have set out,'' said Carsten Koernig, who heads the Berlin-based BSW German solar lobby group, in a statement on the organization's Web site. ``But the risk of the market collapsing has been exorcized.''
The fixed price utilities pay for electricity generated at offshore wind turbines will stay level until 2015 and then decline 5 percent a year, while prices for power from geothermal, water and other sources will fall between 1 and 1.5 percent a year starting next year.
www.bloomberg.com

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