Germany was replaced by the United States as the world's No.1 market for newly installed wind turbines last year due to falling subsidies, the German wind energy federation BWE said on Tuesday. While new installation of wind turbines worldwide rose about 31 percent overall to 20,076 megawatt (MW), new installations in Germany slumped 25 percent to 1,667 MW last year, the association said in a statement.

Renewable energy made up more than 14 percent of Germany's electricity consumption in 2007, but further progress may be hindered if government support is cut back, according to new statistics. ...Energy drawn from wind, solar, water, biomass and thermal heat accounted for 9 percent of Germany's total primary energy consumption last year ...

Federation president Johannes Lackmann said investment in renewable energy sources turbines had actually fallen in 2007 and called on the German government to do more to stimulate its growth. "The government's current provisions are insufficient to continue the successful course of recent years," he said. Tax breaks and other subsidies that renewable energy sources receive in Germany are due to be gradually phased out over the next few years, which "green" producers say will erode their already weak competitiveness compared to traditional energy sources such as coal and nuclear power.

Subsidies for Germany's solar industry will be cut back more than previously announced to free up funds for offshore wind power plants, sources close to the German environment ministry said. The government plans to increase the maximum subsidy for wind power to 0.11-0.14 eur per kilowatt hour from currently 0.09 eur, the sources said. The changes will also force solar power firms to increase the profitability of their facilities if subsidies are cut. German environment minister Sigmar Gabriel is expected to make a statement on the Renewable Energies Law today.

Since the oil shocks of the 1970s, governments around the world have paid plenty of lip service to renewable energies such as wind and solar power. But only a few governments have been able to engineer policies that have begun to bring alternative energies into wider use. Renewable fuels provided 18% of the world’s total electricity supply in 2004, according to figures from the International Energy Agency, a Paris-based intergovernmental organization. Almost all of that, though, came from hydropower, a source with limited growth potential because of geographic constraints. The use of wind and solar power is growing, but they still generated only 1% of global electricity production in 2004, the latest year for which figures are available.

World leader in terms of installed capacity is Germany (20,621 MW), followed by Spain (11,615 MW), the USA (11,603 MW), India (6,270 MW) and Denmark (3,136 MW). According to Peter Ahmels, President of the German Wind Energy Association, the secret of Germany’s fast growing wind energy market lies in the feed-in system with fixed prices for 20 years: “So investors know exactly what they get. Compared to several other systems in Europe, the German feed-in law is one of the cheapest.” Christian Schnibbe of Wind Project Development adds: “Due to a reliable and sustainable basis of the Erneuerbare Energien Gesetz (Renewable Energy Law in Germany, ed.) and a growing industry, wind has become mainstream. In addition, the growing international demand for renewable energy has also pushed the development in Germany.”