A 2:00 A.M. Friday morning a compromise was reached between the Christian Democratic Union and the opposition Social Democratic Party to cut feed-in tariffs at a rate lower than the initial 25 percent to 30 percent proposed earlier this month by CDU MP Joachim Pfeiffer
. Herman Scheer, president of Eurosolar and an SDU MP, acknowledged an agreement was made, though he wouldn't give specifics on the tariff cut. Scheer did say the biggest facilities could face a subsidy cut of close to 10 percent in 2009
Solar stocks were up in morning trading across Europe, with Q-Cells surging 8.8 percent in early action, while REC also moved up 6.8 percent. The speculation regarding a possible Q-Cells sale of its REC holdings has not been resolved
. The extent of the feed-in tariff reduction compromise will be announced on Monday when the draft legislation is reconciled with the existing law, known as the EEG. The new law may be voted as early as Friday of next week - the vote on the new tariff was initially scheduled for late June or early July.
The compromise comes at a crucial time for the solar industry, which is also facing possible subsidy cut backs in Spain, Italy, and the United States. Spain's feed-in tariff program will expire in September 2008, and many have speculated that it is unlikely to be renewed in its current form. Any adjustment would likely have a negative impact on the Spanish solar industry. In the U.S., solar installers and integrators are already starting to feel the pressure stemming from the high probability the investment and production tax credits will not be renewed. For the last few weeks, a fear has moved through the industry that the collapse of the German, Spanish, and American programs would send the solar markets into a tailspin. The news that Germany's tariff cuts are less than initially expected may be a good step forward to halting the downward motion.