Germany's governing parties have reached an agreement on the revision of the Renewable Energy Law (EEG) also known as a Feed-in Tariff (FIT). Wind energy stands to receive further promotion while the price being paid for solar energy will be cut. Germany's social democrats (SPD) had advocated moderate adjustments below 8% deviation per year, parliament members of the Christian democrats (CDU) had caused a small stir when demanding cutbacks for solar energy subsidies of up to 30%.

On Friday the governing parties agreed on a common framework for the revision of the EEG to be presented to the German Parliament in the next week. Subsidies for roof top solar photovoltaic (PV) systems will be reduced annually by 8% from 2009 to 2010 and then by 9% annually from 2011 onwards. Currently these subsidies were subject to reductions of 5% per year.

New solar parks at ground level will be subject to reductions of 10% per year in 2009 and 2010. Until now, the digression for solar parks had ranged been approximately 6.5%. Germany’s Solar Industry Association (BSW) estimates that larger solar plants might soon forfeit profitability as a result of the larger digressions. The coalition also decided to withdraw subsidies for building-integrated PV systems. The German Parliment could decide on the matter as early as this week.