Monday, August 17, 2009

Trade War: "Germany Solar Incentives in Jeopardy?"

From Greentech:

German politicians have revived debates over the popular feed-in tariff, some arguing that the subsidies benefit largely Chinese – instead of German – companies.

More than a year after German politicians fought over whether to dramatically slash the country's solar incentives, they are going at it again, this time ahead of a federal election next month.

In media interviews, political leaders from major parties have expressed concerns that the incentives, called feed-in tariffs, have largely benefited Chinese solar energy equipment makers instead of Germany's own, according to Alexander Karnick, an equity analyst at the Deutsche Bank, in a research note Monday.

The chatter has come about in advance of the parliamentary election on Sept. 27. A change in the political makeup of the ruling coalition could have a significant impact on solar energy policies over the several years if not sooner, Karnick wrote.

There isn't a strong indication at this point that Germany would lower its solar incentives soon, he added. "However if realized, it could mean a strong setback to 2010 demand, as well as margin expectations," Karnick said.

Until last year, Germany had been the world's largest solar market thanks to its feed-in tariffs, which require utilities to buy all the solar energy produced at premium, government-set prices. Spain took the lead last year, but the government has since reduced the subsidies and capped the amount of energy that could be sold under the subsidy program....MORE