A pick-up in solar panel installations in Germany in recent months is likely to cut industry incentives more than expected next year, government and industry sources said on Wednesday.
About 1,250 megawatts (MW) of solar power capacity was installed in June and July, more than in the first five months of the year combined, two people familiar with the figures told Reuters on Wednesday.
Germany's network regulator declined to comment, saying it would soon publish figures for installations in June.
Government sources said incentives for solar power will likely be cut by 15 percent in January as a result, 6 percentage points more than planned but still well below the maximum cut of 24 percent the government can make.
The photovoltaic (PV) industry still relies on government so-called feed-in tariffs which solar power producers can use to offset against their energy bills.
Solar industry association EPIA said this week it could take until the end of the decade for solar energy in Europe to be cost-competitive with fossil fuel generation.
Governments have been cutting back on support to force the industry to lower its costs at a faster rate, a move that has hurt companies in the sector including Germany's Conergy (CGYGk.DE), Q-Cells and Solon .
Germany's government scrapped a planned reduction of incentives in July, giving companies more time to whittle away their costs, after the volume of new solar panel installations in the country fell dramatically.
Germany derived more than a fifth of its total power requirement from renewable sources in the first six months of the year and aims to raise that proportion to 35 percent by 2020.