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German Solar Industry Could Face Subsidy Cuts Close To 30% Sources

Germany’s photovoltaic-solar-energy industry faces a reduction in state subsidies that could be close to 30%, people familiar with the matter said Thursday.

Environment Minister Norbert Roettgen next week plans to present a proposal that foresees cutting solar subsidies by a double-digit percentage, the people within the industry told Dow Jones newsletter Energy Daily.

The cuts could take effect as early as April, or July at the latest, they said.

There could be further cuts from the beginning of next year if installations of new photovoltaic facilities in 2010 exceed last year’s expansion, the people added.

Combined with annual cuts for photovoltaic-solar facilities of between 8% and 10% that already have been agree to under existing legislation, the additional cuts could amount to a reduction of 20% to nearly 30%, the people said.

Germany subsidizes photovoltaic-solar-energy facilities–such as rooftop installations–with so-called feed-in rates that guarantee minimum prices for the electricity they generate.

Market observers estimate that a total photovoltaic-power-generation capacity of up to 3 gigawatts will be newly installed in 2009. However, final figures for last year’s new installations haven’t yet been published.

In 2008, new photovoltaic installations in Germany added a generation capacity of around 1.5 GW.

German economic research institute RWI last year projected that the costs of solar subsidies could reach EUR77 billion by 2013, up to EUR11 billion more than originally expected.

The German government has pledged to cut the subsidies to contain the costs.

-By Ali Ulucay, Dow Jones Newswires; +49-69-29-725-503; jan.hromadko@ dowjones.com

(Jan Hromadko contributed to this article.)