Demonstration against Germany's plans to cut solar power incentives

Thousands protest Germany's solar cuts

Thousands have gathered in Berlin to protest government cuts to solar power incentives.

The solar industry says the cuts will reduce the market for new installations in Germany, the world's largest, to just a quarter of its size and result in massive job losses.

Concerned by rapid growth in Germany's solar sector, which has seen the development of almost as much capacity as the rest of the world combined, the government last month approved plans to slash state-mandated incentives for photovoltaic electricity.

Guenther Cramer, president of Germany's Solar Energy Association (BSW), said the cuts could wipe out the industry and made no economic or technical sense.

"What solar energy does though is take away market share from the big utilities companies," he said, making it a "thorn in their side".

So-called feed-in tariffs helped Germany's solar industry to blossom over the past decade, leading to a number of stock market listings and creating about 150,000 jobs at companies ranging from SolarWorld AG to Q-Cells SE.

Capacity grew by around 7,000 megawatts in both 2010 and 2011, far above the 2,500 to 3,500 megawatts Berlin would like to see each year.

Subsidy cuts of up to 37 per cent were slated for March 9, although these could be delayed until April 1 and may be watered down.

The government argues excess capacity has weighed on distribution grids and subsidies have pushed prices higher.

Solar subsidies cost consumers about 2 cent per kilowatt/hour or 70 euros per year. 

Solar-generated electricity accounts for about 4 per cent of total consumption in Germany.

The opposition Social Democrats (SPD) and Greens criticised the cuts, as did some deputies in Merkel's Christian Democrats (CDU) and their sister party in Bavaria, the CSU.

Bavaria has strongly benefited from the solar boom.

"The cuts would threaten my job and thousands of others. They make no sense and run against the tide of people taking the way they use energy into their own hands," said demonstrator Carsten Nuhn, 45, from Hesse, who set up a company installing solar panels in 2003.

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