BERLIN (Reuters) - New solar power installations in Germany hit a record high last year but tapered off in the fourth quarter as subsidies were cut to curb costs to consumers, Environment Ministry data showed on Saturday.

Capacity grew by more than 7.6 gigawatt (GW), breaking the previous records of 7.5 GW in 2011 and 7.4 GW in 2010, and far above the 2.5 to 3.5 GW Berlin would like to see each year.

The solar boom has been encouraged by generous feed-in tariffs, which are guaranteed to generators for 20 years to encourage carbon free power to gradually replace fossil fuels.

But renewable energy has become politically divisive as businesses complain the shift away from nuclear power towards subsidized renewable is adding to consumer costs and jeopardizing economic growth.

The government agreed last year to cut the level of feed-in tariffs - the industry’s lifeblood as long as solar power is more expensive than conventional forms of energy to produce - in order to reduce the pace of installations.

Tariffs were cut by 2.5 percent a month between November 1, 2012 and January 31, 2013.

An Environment Ministry spokesman said installed capacity in the last quarter of 2012 was less than a fifth of overall installations last year.

He said 611 megawatts (MW) had been installed in October, 435 MW in November and 360 MW in December. “This shows that the amendment is working,” he said.

The ministry expects new solar power generating capacity of between 3.5 and 4 GW in 2013.

The share of renewable subsidies within the overall power bill rose 47 percent on January 1, 2013, to 5.3 cents a kilowatt hour, raising the subsidizing cost per average household by 60 euros ($79.10) to 185 euros for the year.

Private consumers bear the brunt of the costs of renewable energy subsidies after the government gave breaks to energy-intensive industry, cutting some of the green energy and network usage costs for companies.

The association of solar producers said on Tuesday its members supplied 8 million households with power, 45 percent more than in 2011, and accounting for 5 percent of total power usage.