London, UK -- With some irony, it appears that the success of German's solar photovoltaic (PV) feed-in tariffs, enshrined in the Renewable Energy Sources Act, or Erneuerbare-Energien-Gesetz (EEG), has lead to the federal government's proposal to cut them.

Berlin has decided to accelerate the annual rate by which it will reduce the solar feed-in tariff from five percent to ten percent, partly because the overwhelming success of the scheme lead to concerns that its generous support was causing a proliferation of solar installations that were becoming less affordable as the German economy entered recession.

The success of the scheme has meant many more installations than expected have secured support under the EEG. Given the lower initial expectations, the subsequently much larger number of qualifying installations has taxed the allocated budget. With the economy in decline, this has meant the generosity of the scheme has become less affordable.

Consequently, the government cut the tariff for new solar plants by around 10 per cent on 1 January 2010. However, at around the same time as the shrinking of Germany’s economy in 2009, the price of silicon went into a slump, which in turn led to significant reductions in installation costs. Calls followed for a further reduction in the feed-in tariffs.

In response, the Ministry for the Environment released plans in January to reduce solar funding by a further 15 per cent in the summer of 2010 and by that amount again at the start of 2011 – this is in addition to reductions already planned.

Although the amendments are not yet law as the coalition government is still negotiating on the draft-proposal, reports in the media suggest that roof systems will receive 16 per cent less in feed-in tariff in June, in addition to the January cut of 10 per cent. They will also suffer a two per cent cut per 1000 MW of newly installed capacity should the market raise above a certain – currently < - limit.