The EEG – politics makes the solar economy weak

The environment ministers of North Rhine-Westphalia and the leading candidate Norbert Röttgen on Wednesday adopted legislative package, the EEG, which was met with opposition by the state. The updated Renewable Energy Sources Act (EEG), which proposes further solar subsidy cuts, is expected to be rejected by the governments of the eastern states of Germany.

The cuts, from between 20 – 40% with retrospective effect from 1 April, will severely affect states that are home to large solar companies – these days jobs are dependent on political decisions. Therefore, Saxony-Anhalt (where Q-Cells recently dismissed 1300 people), Saxony (SolarWorld announced losses of €300 million for 2011) and Thuringia are expected to vote against the changes to the Renewable Energy Act. The position of the governments of Berlin and Brandenburg (where First Solar closed, eliminating 1,200 jobs) could tip the scales and will play a crucial role in the planned vote on Friday. It could only amount to a conciliation procedure however.

Whether or not this can be considered a win for the solar industry must be examined from several angles; further delays and less political decisions will not bring back security and dynamism to photovoltaics. In the medium term, however, a rejection of further cuts offers a glimmer of hope for solar companies who have needed to dismiss the majority of employees and are struggling with a severe decrease in orders. The 10,000 jobs already lost, BSW Managing Director Carsten König says, is not only painful for the solar industry, but is also a bitter blow with regard to the labour market situation in Germany. Photovoltaic and solar industries are growing markets that are needed in Germany.

It remains to be seen how the states will act on 11 May. In North Rhine Westphalia elections will be held on Sunday. (Source: AP, Reuters)