The German cabinet, under the leadership of Chancellor Angela Merkel has removed a controversial proposals to include an extra 6% cut to the German feed-in tariff next year. The German cabinet today agreed on closing all its nuclear power plants between 2015 and 2022. Although wind energy will be supported at higher rates to secure 35% of its energy needs come from renewables, the solar industry retains support but without the extra FiT reductions.

In a week that sees the global PV industry verge on Munich, Germany for Intersolar Europe, a serious concern held by the industry that PV installations in Germany would suffer a serious decline due to the continued cuts has been lifted.

The German cabinet agreement means that on January 1st, 2012 only a 9% cut to the FiT is expected. However, each annual gigawatt of PV installations over the quota of 3.5GW will result in a further 3% cut in the FiT. This will be applied to the 12-months to the end of each September.

A 24% ceiling cut has also been proposed should installations reach over 7.5GW. The same system will also be adopted for 2013, potentially giving much needed mid-term stability to the tariff conditions.

According to a research note from Jeffries International, ‘The German solar market is going to remain the bedrock of global solar at least for the next three years with the minimum annual goal of 3.5GW.’

Ratification is expected later this month.