Germany, Italy Reign In Renewable Energy Subsidies

Italian Prime Minister Mario Monti is concerned over rising electricity and gas prices and the government may, in turn, reconsider its renewable energy subsidies. So reports Reuters.

In addition to hurting Monti’s support, higher energy prices could also hurt support for economic reforms that critics say have impacted Italian citizens the most.

In late March, Italy’s energy authority announced a 5.8 percent rise in electricity prices. Renewable energy subsidies will add an additional 4 percent, the authority said. It also called for a reconsideration of green energy subsidies that could cost EUR 10 billion this year.

The price increases come after a series of austerity measures aimed at curbing Italy’s public debt. They resulted in higher healthcare costs, as well as increases in housing and fuel taxes and pension caps, Reuters reports.

Monti was appointed in November to help Italy avoid a debt crisis. He has helped restore market confidence, but is facing an increasingly difficult audience.

Meanwhile, German parliament approved cuts in aid to solar power by as much as 29 percent starting  April 1. The move comes as an attempt to reduce the pace of installations in the nation, which is the biggest solar power market in the world. That’s according to Bloomberg.

Solar power incentives pushed capacity past government targets, prompting Chancellor Angela Merkel to cut subsidies even as she seeks alternatives to nuclear power.

Industry officials say the cuts will depress installation levels and threaten manufacturers that are already struggling with competition from China.

The U.K., Italy and France have also accelerated cuts for solar subsidies in the past year, Bloomberg says.

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

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

 

Tags: Policy , Solar

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