Italy, Germany Clarify Solar Subsidy Cuts

Italy and Germany both took steps this week towards reductions in solar subsidies that have been the center of much speculation. The global solar industry has been affected this year by the impending cuts in both markets, where generous subsidies are currently available for solar installations.

Germany’s upper house of parliament passed a plan to reduce feed-in tariff rates up to 16% for rooftop solar systems, 15% for farm-based systems and 11% for installations on former industrial or military sites.

The cuts will be retroactive to July 1, according to a Bloomberg report. However, they will be scaled back by 3 percentage points across the board for the first three months–through September 30. 

In Italy, legislators introduced a bill that would cut the feed-in tariff there beginning in 2011. 

Tariff rates, which mandate a higher price for solar-generated electricity, would reduce 6% every four months in 2011 and an additional 6% in the following two years.

According to solar analyst Francesco D’Avack of Bloomberg New Energy Finance, Italy would still have one of the most attractive markets for solar. "There are a couple of fat years ahead for developers,” he said.

The law is expected to win parliamentary approval. It also will establish a 3-gigawatt cap for solar projects by the end of 2013.

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