German Lawmakers Compromise on FiT Reductions

German lawmakers have today (July 9) approved the easing of solar subsidy cuts for three months, lessening the blow by three percentage points until the end of September. The proposal has now been passed by a committee of both houses of parliament, changing the government plan to cut subsidies for solar power fed into Germany's electricity grid by 16% for rooftop equipment, 15% for farmland and 11% for spaces such as former industrial or military sites.

The reductions will be introduced retroactively from July 1, scaled back by three percentage points for each category until Sept. 30, when the full 16, 15 and 11% cuts will take effect.

Germany's solar industry says the three-month reprieve will do little to shield the industry, beyond offering a slightly softer landing in the short term. Industry representatives in Germany have warned this week that the feed-in tariff cut will increase pressure on companies such as Q-Cells and Solarworld as they face competition from producers in China.

"Germany's solar industry now faces the big challenge of lowering production costs even faster than they were cut in the past," said Carsten Koernig, head of the BSW German solar-industry lobby.

"It's not much of a concession, and it won't really change anything for any companies," said another spokesman for trade body BSW. "But we're happy the debate is finally coming to an end, so industry and consumers will have a basis on which to make plans."

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