The bill adopted by the German Parliament for reducing solar subsidies is now expected to come before the government's Mediation Committee, per a decision from the German Federal Council.
A blockade of several federal states against this bill has emerged in recent weeks, which means that federal and state governments will now be required to negotiate in a mediation process to find a compromise. This process could take up to months and may lead to a stalemate, according to German market research firm EuPD Research.
During mediation, the committee will look at installation corridors, levels and scales of remuneration rates, and the model of market integration. Solar storage systems may also be discussed.
If a compromise is not reached, the Federal Council could lodge an appeal against the bill. This could, in turn, override the Parliament with an absolute majority, EuPD Research says.
Consequently, it could now take months until Germany's planned solar feed-in-tariff (FIT) cuts go into effect. However, FIT decreases are expected to be implemented retroactively for plants that were connected to the grid after April 1.
Shortly after Germany's Economics Minister Philipp Rosler and Federal Environment Minister Norbert Rottgen announced their FIT reduction plan in March, Germany's solar sector organized a mass protest. Several federal states and members of some political parties opposed the plan as well.
For solar companies and investors, the uncertainty now occurring as a result of the mediation process could inflict further harm on the industry, EuPD Research warns.