Germany plans aid package for solar and photovoltaic industry

21 April 2010 18:37  [Source: ICIS news]

TORONTO (ICIS news)--Germany is planning special aid worth some €600m ($810m) to help its solar and photovoltaic industry against foreign competition - a move that could partially reverse earlier plans to cut subsidies to that industry, officials said on Wednesday.

Many chemicals and specialty materials firms are developing the photovoltaic and solar sector as an important growth market for their products. Germany’s Wacker Chemie, for example, on Wednesday started up a new 10,000 tonne/year polysilicon plant at Burghausen, Bavaria.

Michael Kretschmer, a parliamentarian with chancellor Angela Merkel’s ruling government coalition, said the planned package included a €100m government contribution over three years, mainly for research and development in the country’s eastern states.

An additional €500m would come from industry and other sources, he said.

“This clearly shows that Germany is supporting solar energy,” Kretschmer said, but added that the measure had yet to be finalised by cabinet.

Critics said the programme seemed to be a political move to appease opposition among some German states against the government’s earlier plan to cut solar subsidies for rooftop and other photovoltaic systems.

With a duration of only three years, the programme would be of little use, said Barbel Hohn from the opposition Green Party. Rather, the government seemed to be trying to “buy off” opposition to the earlier cuts in the Bundesrat, the upper legislative chamber that represents Germany's state governments, she said.

Germany grants producers of solar energy, including domestic households with photovoltaic panels on their roofs, favourable feed-in tariffs for their electricity. Those subsidies count as among the most generous in the world.

However, the government said earlier this year it planned to reduce those subsidies, in line with sharply declining costs for installing solar systems.

These cuts had been vehemently opposed by Germany’s photovoltaic and solar industry, which employs some 60,000 workers.

Analysts said the government seemed to be giving in to pressure from the industry - after having first argued that the sector was essentially over-subsidised.

($1 = €0.74)

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By: Stefan Baumgarten
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