Thousands gathered in Berlin this week to protest looming cuts to solar power incentives, which the solar industry says will reduce the market for new installations in Germany, the world’s largest, to just a quarter of its size and result in massive job losses.

Concerned by rapid growth in Germany’s solar sector, which has seen the development of almost as much capacity as the rest of the world combined, the government last month approved plans to slash state-mandated incentives for photovoltaic electricity.

Guenther Cramer, president of Germany’s Solar Energy Association (BSW), said the cuts could wipe out the industry and made no economic or technical sense.

“What solar energy does though is take away market share from the big utilities companies,” he said, making it a “thorn in their side”.

So-called feed-in tariffs helped Germany’s solar industry to blossom over the past decade, leading to a number of stock market listings and creating about 150,000 jobs at companies ranging from SolarWorld AG to Q-Cells SE.

Capacity grew by around 7,000 MW in both 2010 and 2011, far above the 2,500 to 3,500 MW Berlin would like to see each year. Subsidy cuts of up to 37 per cent were slated for March 9, although these could be delayed until April 1 and may be watered down.

The government argues excess capacity has weighed on distribution grids and subsidies have pushed prices higher.

For more solar photovoltaic news