Solar power companies face end of Spanish subsidies

Growth in solar power installations in Italy may not be enough to offset shrinking global demand, Italian industry experts say.

Part of that reduced demand could come in Spain, where solar power companies face a drastic slowdown next year because the government is preparing to sharply reduce subsidies.
Generous subsidies in Spain will expire this month after the subsidies encouraged the installation of 1,000 megawatts in new solar plants this year. That has made Spain the world’s biggest market after Germany, where the government expects 1,350 megawatts of new solar plants to go online this year.

Now the Spanish government wants no more than 300 megawatts of new plants to be eligible in 2009 for so-called feed-in tariffs under which producers are paid at fixed rates for electricity generated from renewable resources and are designed to make solar power competitive. Those tariffs will be reduced.

David Wortmann, head of renewable energy at the German government investment agency, said he was cautious about growth prospects in Germany. The country has no cap on feed-in tariffs, but they are set to slide and will depend on how much is installed.

International Herald Tribune