Who’s Cutting Clean Energy Subsidies?

China

China, the world’s largest producer of solar panels, cut subsidies for demonstration sun power projects approved in 2011 and 2012 after the cost of components declined. That’s according to Bloomberg.

The government reduced the subsidy for projects approved last year by 11 percent, the Ministry of Finance told Bloomberg.

The subsidy applies to projects developed by owners who will consume the power for their own use.

According to Bloomberg, the Chinese government may start making intermittent cuts in subsidies if prices continue to decline.

To read the full article by Bloomberg cited in this story, click here

U.K.

The U.K. is expected to announce plans to reduce subsidies for solar energy at routine intervals as part of an effort to curb a boom in installations, Bloomberg reports.

The plan will include a trigger mechanism that will automatically cut above-market rates paid for power from solar cells once installations reach a predetermined level, Bloomberg says.

The proposals aim to limit subsidies while giving developers more clarity about the support they can expect and when the government will make changes, Bloomberg adds.

Britain’s proposal is similar to the system in Germany, the world’s largest solar market, which reevaluates support every six months.

To read the full article by Bloomberg cited in this story, click here

Spain

Spain’s decision to temporarily halt subsidies for new renewable energy projects will hurt investments in the industry, the European Commission’s energy spokeswoman told Bloomberg.

Spain halted subsidies for renewable energy projects on Jan. 27 to help curb its budget deficit and rein in power system borrowings backed by the state that reached $31 billion last year, Bloomberg says. Spain passed a decree stopping subsidies for new wind, solar, co-generation and waste plants not approved by that date.

The renewable plan may help Spain toward its tariff deficit target for 2012 while reducing the risk that power companies suffer from a more damaging retroactive cut, but it will not eliminate the annual tariff deficit, Fitch Ratings said in a statement.

Spain is Europe’s second largest renewables market with an installed capacity of 27,500 megawatts of wind and solar projects. It got 20% of power demand last year from these plants.

The European Commission says it would prefer that reforms are undertaken following best practices across Europe.

About 3,850 megawatts in renewable energy projects have permits to be built in the near future with current subsidies. Of this, photovoltaic installations amount to 427 megawatts, solar thermal power plants about 1,425 megawatts and wind projects 2,000 megawatts, Bloomberg says.

To read the full article by Bloomberg cited in this story, click here

To read the full article by Bloomberg cited in this story, click here

Germany

German Environment Minister Norbert Roettgen and Economy Minister Philipp Roesler are in talks to draw up a joint policy on solar power subsidies, Bloomberg reports.

The ministers were previously in disagreement over the subsidies after Germany installed a record 7.5 gigawatts of solar power last year, which was more than double the government’s target. They met February 1 and plan to table a combined proposal to adjust the subsidies as soon as possible, a spokeswoman told Bloomberg.

Germany may cut the state’s support as early as April to contain an expected rush in installations in the first half, Bloomberg says.

Meanwhile, Reuters reports that fears Germany will cut subsidies has boosted demand for its solar panels. This could give Germany an industry advantage versus China.

Installations of solar panels have boomed in Germany over the last two years due to feed-in tariffs, or lavish subsidies utilities are forced to pay by the government to those who generate their own solar power. Ultimately, however, power companies pass on the costs to their customers and, as the burden on consumers intensifies, Germany wants to tighten its grip on the market and is trying to figure out how to best curb demand. Proposals range from monthly cuts in feed-in tariffs to an outright cap on subsidies, Reuters says.

To read the full article by Bloomberg cited in this story, click here

To read the full article by Reuters cited in this story, click here

India

India joins European powers that are cutting clean energy subsidies as equipment costs plunge.  India’s largest solar program cut the preferential rate it pays utilities for sun power as global prices of the panels declined by more than 50%, Bloomberg reports.  The rate was cut by as much as 33%.

To read the full article by Bloomberg cited in this story, click here

Tags: Policy

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