Ah, here we go again with more subsidy cut rumors.  This time it’s Spain.  While rumors have been swirling for months that Spain would cut subsidies, Bloomberg reported today that an industry lobbyist believes that Spain will make substantial solar subsidy cuts to both existing solar installations and new installations following a meeting Spain’s Deputy Industry Minister Pedro Marin.  I agree that cutting subsidies on future solar installations is healthy and an important part of the maturation process, but cutting revenues of existing installations seems excessive.  I suppose that’s what happens when you’re in a cash crunch.  The government estimates the cuts will save up to EUR840 million and reduce electricity costs for consumers.

Plans call for cutting the revenue of existing solar power plants by 30%, new ground based solar systems by 45%, large solar rooftop installations by 25% and small solar rooftop installations by 5%.

Solar executives and industry trade groups that represent the billions invested in Spain with the idea that prices would be guaranteed for 25 years under a 2007 law feel robbed.  Tom Diaz, director of external relations at the Photovoltaic Industry Association in Madrid, says it’s incomprehensible and that hundreds of solar power producers would go out of business should the proposals become law.  (Via Businessweek)

Spain’s Industry Ministry declined to comment, but said it hasn’t made public its proposed reductions.  A decision is expected within a few weeks. 

Solar companies with significant exposure to Spain such as Yingli Green Energy (YGE), Sunpower (SPWRA), Canadian Solar (CSIQ), Solarfun (SOLF) and Suntech (STP) all held up reasonably well today despite the rumors.