DUESSELDORF, Germany (Reuters) – Germany's solar industry can look ahead to continued state support despite a victory by center-right parties that are widely expected to cut subsidies, senior sector figures told Reuters on Monday.
Chancellor Angela Merkel's conservatives (CDU) and the business-friendly Free Democrats (FDP) secured a parliamentary majority on Sunday, enabling Merkel to end her awkward four-year-old partnership with the Social Democrats (SPD).
"The CDU as well as the FDP have both clearly shown support for the renewable energy act," Frank Asbeck, the chief executive of Solarworld, one of Germany's largest solar energy companies, said in a telephone interview.
And the head of the German BSW solar industry association, Carsten Koernig, said: "The solar industry, with its 80,000 staff, has become the backbone of Germany's mid-sized businesses."
"I don't think any government can afford to frivolously gamble with the acquired technological advantage."
Germany's Renewable Energy Act (EEG) has been copied in dozens of countries around the world and guarantees investors fixed feed-in tariffs for solar power that utilities are obliged to buy at high prices.
The act will come up for revision in 2011. UBS's Martin Lueck said he was cautious on solar companies because subsidies were set to decline under the influence of the pro-market Free Democrats in the new government.
Shares in the world's largest solar cell maker Q-Cells were down 3.3 percent by 0955 GMT, while Solarworld's had fallen 1.9 percent and Conergy's were down 3.4 percent.
German utility stocks rose as the new center-right government is widely expected to extend the life of the country's nuclear reactors.
LEVEL PLAYING FIELD
Asbeck, a founding member of the German Green Party, affirmed his call for a faster reduction of feed-in tariffs — incentives that utilities are obliged to pay for power generated from renewable sources — in Germany.
He told a conference last week in Hamburg that lowering feed-in tariffs by 10-15 percent in 2010 was possible, which is higher than the 8-10 percent envisaged by the EEG.
Asbeck said his proposal was tied to the introduction of general environmental and quality standards in regulation that would have to be followed not only by German but also by U.S. and Asian players, creating a more level playing field.