Germany doubles photovoltaic solar energy capacity at start of 2012

But the industry has warned it faces a sharp contraction if the government presses on with plans for a bundle of incentive cuts that could total slash support for solar by 40 per cent.

The government is seeking to change a system of scheduled cuts, over concerns that the scale of installations has overtaken its renewable energy targets.

The German Bundestag, the lower house, approved the planned cuts on 29 March, however the Bundesrat – the upper house – could still appeal the decision.

According to Germany’s Solar Industry Association (BSW-Solar), the Bundesrat’s environmental committee last week urged the house to enter into negotiations with the federal government on amendments to the law, and a decision on that recommendation is expected on May 11.

Günther Cramer, president of BSW-Solar, warned that many companies are already experiencing a significant drop in orders and thousands of jobs have been lost in recent weeks.

Earlier this month, leading solar cell producer Q-Cells filed for bankruptcy, potentially leading to more than 1,000 redundancies in the eastern German town of Bitterfeld-Wolfen. Odersun, which once provided solar cells for Beijing’s Olympic Park in China, also filed for bankruptcy at the end of March.

The problem is aggravated by a global glut of supply and strong competition from Chinese rivals such as Xinjiang Goldwind and Sinovel Wind Group.

"What we now need is quick damage control to safeguard tens of thousands of jobs in production, sales and installation and to protect the existence of many medium-sized solar companies," said Cramer.

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