German solar industry warns of ending subsidies after Minister proposes reductions

The German solar industry warned against the proposed end of subsidies for rooftop photovoltaics systems. They argued that withdrawing support from small installations could jeopardize the country's climate targets.

Feed-in subsidies have been in place for 25 years to help expand the solar energy sector. They guarantee a price for producers of renewable energy who sell their power on the grid.

The German government has made progress in its goal to cover 80% of the country's electricity needs by renewable sources by 2030.

The biggest economy in Europe is still struggling to grow after two years of contraction. Government finances are also under pressure due to the government's efforts to increase defence spending, revitalize industry, and upgrade aging infrastructure.

In an interview published in the Augsburger Allgemeine on Sunday, Economy Minister Katherina Riche said that small rooftop systems which primarily benefit private households no longer require public funding.

She added that the system operators would also be responsible for some of the cost of grid expansions to accommodate the growing solar power production.

Carsten Koernig of the German Solar Industry Federation said that the subsidy was necessary for the banks to provide financing. He added that without them, only four of every ten homeowners would purchase a home solar power system.

Koernig said that the subsidy was already paying off for the society.

Enpal, a Berlin-based renewable energy company, said that the government will need to increase rooftop solar capacity to reach its renewable power generation targets by making it more appealing to small producers.

A spokesperson for the company said: "It is clear that this is a situation which requires a robust regulatory framework."

Reiche's plan to reduce subsidies comes at a time when the solar industry is already experiencing a slowdown in demand, due to rising rates of interest, a changing political climate and general uncertainty.

According to SPD's spokesperson for energy policy, it also contradicts the policies agreed upon by Reiche's conservative CDU and its governing partners, the Social Democrats, when they formed an alliance earlier this year.

Nina Scheer said, "We agreed in our coalition agreement that private households should be the actors of their own energy supply." "We need to make progress on the expansion of energy storage, not worry."

(source: Reuters)