Germany's Environment Ministry on Friday dismissed a proposal from the Economy Ministry to reduce the growth of new photovoltaic installations to 1,000 megawatt (MW) a year, saying a 15-percent cut for 2012 was enough for now.
The spokeswoman for Environment Minister Norbert Roettgen told a government news conference there were already cuts scheduled for 2012 and that there was no need at the moment to go beyond that. She said if cuts are too steep it would "choke off" the photovoltaic sector.
A spokeswoman for Economy Minister Philipp Roesler took an opposing view. She told the news conference why cutting solar power support further was needed. She said solar incentives are responsible for most of the 3.5 cents per kilowatt hour added to consumers' bills for renewable energy even though they only make up 3 percent of Germany's electricity.
The Economy Ministry released a paper on Thursday with a proposal to reduce the growth of new photovoltaic installations to 1,000 megawatt (MW) a year, a move that would dethrone the country as the world's largest market for solar panels.
The suggestion follows a newspaper interview by Roesler, leader of Chancellor Angela Merkel's junior coalition partners the Free Democrats, who said reducing new capacity to 1,000 MW, or 1 gigawatt (GW), per year would help contain costs of the incentives that utilities pay to solar power producers.
If turned into legislation, the move would effectively lead to a collapse of the German solar market, the world's biggest, and slam a sector that has already suffered from massive price declines and falling government subsidies.
Last year Germany installed a record 7.4 GW of new solar power capacity, which was nearly half of the world's total of 16.6 GW installed, figures by the European Photovoltaic Industry Association (EPIA) showed.
Despite steep cuts in solar power incentives, Germany is expected to add about 5.2 GW this year.
The Economy Ministry paper will run into stiff opposition from the Environment Ministry, controlled by Merkel's conservatives, which last year reformed the feed-in tariff system to cut incentives to 28.74 cents per kilowatt hour (kWh) and is opposed to further cuts.
The feed-in tariff will fall another 15 percent, as scheduled in the reform, on January 1, 2012.
The pro-business wings of the FDP and Merkel's CDU have long pushed for a cap on photovoltaic power.
Michael Kauch, FDP environment expert in parliament, said in a statement on Thursday the proposal from the Economy Ministry did not seek to put a firm cap on solar power installations in Germany. He said cutting new installations could be achieved by cutting the feed-in tariff more steeply.
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