Germany has had a generous subsidy policy to promote renewables, especially photovoltaic cells, but Environment Minister Norbert Roettgen and Economy Minister Phillip Roesler proposed a plan last month to cut subsidies for solar power by almost 30 percent, Inter Press reported.
Analysts suggest the success of solar power is driving costs too high for the German government, which in December paid out a subsidy of more than $10.5 billion with the addition of 7,500 megawatts of solar panels.
Some environmentalists say the decision is more political than economic.
"It is true there is a problem, the amount of money being put into the solar industry is high," Cornelia Ziehm at the Deutsche Umwelthilfe (German Environmental Aid) in Berlin said. "But more than this, in this time of crisis the German minister of economy Roesler was in need of a new theme to tackle. He discovered the subsidies for solar energy were quite high so he proposed to cut them as a means to reduce costs for the German citizens."
Complaints about the decision also came from the solar power industry.
"This decision will kill the market for solar energy," Stefan Hief, chief executive officer of Cosmoenergy, manufacturer of photovoltaic cells, said. "If there have to be cuts, they should not be as drastic as the government is proposing. This way, we are going to lose thousands of jobs in the sector, at a time when we are the world leaders in solar power production and the German public is in favor of renewables.
"For us, this decision comes down to nothing but a total solar phase-out," he said.