Subsidies for solar power to be cut by Germany

Germany's government is planning to cut subsidies for solar installations by up to 30 percent due to higher-than-expected demand. The reductions, which could happen within one year, are also down to the scheme proving more costly than initially projected. Germany has been at the forefront of renewable installations in recent years, however the rise in solar projects has surpassed government expectations.

Owners of solar installations in Germany receive a guaranteed above-market price for the electricity they sell to the energy grid. Last year that amounted to a subsidy of around €6 billion (US$7.9 billion), which is financed through a levy on each household’s electricity bill. Concerns have been raised over how the subsidy cuts could affect domestic solar companies, as reductions could come into place as early as next month. Read more ...

Calls to cut subsidies by conservative MP's

More than 100 Conservative MPs are urging the Prime Minister to cut the subsidies for wind turbines. In a letter sent the MPs said that they had “grown more and more concerned” about state payments offered to the industry. More than 50 percent of the revenue by onshore and offshore wind farms in the UK are from subsidies through renewable obligation certificates, which were worth UK£1 billion (€1.2 billion) in 2009. Some expert are concerned that by 2020 these subsidies could cost as much as UK£5 billion(€6.038 billion) a year. Read more ...

UK consider following the German FiT Model

After the defeat of the UK government over the reducing of the solar subsidies without proper consultation. They are now considering copying the German FiT Model of reducing subsidies when installations reach a certain volume. The government is set to introduce phased reductions in subsidies for solar panels that come into force once a certain level of installations is reached.

A consultation on the so-called deployment trigger could be launched as early next week, a spokeswoman for the Department of Energy and Climate Change (DECC) said. "We intend to announce the results of the solar consultation by February 9," said the spokeswoman. "At the same time we'll also put forward proposals to introduce a cost control mechanism for solar PV." Read more ...

The demise of Ethanol Tax Credits and its impact?

The Volumetric Ethanol Excise Tax Credit (VEETC), ceased operations on December 31, 2011. Originally set up to support the ethanol production it has now been relegated to the history books. Historically, the credit played an important role in ensuring the profitability of ethanol production, and it therefore indirectly affected corn prices as well. However, because high gasoline prices have made ethanol competitive on its own and since ethanol consumption mandates guarantee minimum production volumes, elimination of the credit is expected to have minimal impact on the production of ethanol and the demand for corn as a biofuel feedstock. Read more ...

Legal challenge to stop cuts in feed in tariffs

Two solar companies and Friends of the Earth are presenting their case today at the High court seeking permission to challenge the government plans to cut the feed in tariff subsidies. The court had previously ruled that this challenge could not take place, according to Friends of the Earth. But now Friends of the Earth has been given the go ahead to seek the courts permission to reverse that decision.

The Government recently launched a consultation into feed-in tariffs. In it, it proposed halving payments from December 12 - two weeks before the consultation ends. "We strongly believe Government plans to abruptly slash solar subsidies are illegal. We hope the High Court agrees to allow our case to be heard as soon as possible." said Andy Atkins, Director, Friends of the Earth. Read more ...

Government subsidies could stop biomass plants

DRAX the operator of the largest coal-fired power plant in the UK has announced that plans for the new biomass plants are "in doubt"  because of the proposed government subsidy levels. Drax wanted to build two new plants that will burn organic produce in North Yorkshire and North Lincolnshire. Drax was given the go ahead in August for the two plants from energy minister Charles Hendry. The company's interim management statement for November said it was "disappointed" with the proposed level of subsidy for biomass, which is lower than state aid for other renewables such as wind. Read more ...