Speaking at an energy conference in Berlin, Ms. Merkel said she still supports further expansion of renewable energy such as wind and solar power to reduce carbon dioxide emissions. But she said the costs need to be contained as global rivals are benefiting from lower energy prices. Utility executives welcomed her recognition, but criticized her for remaining vague on specifics.

Merkel's policy to wean Europe's biggest power market off fossil fuels and to embrace renewables has led to a boom in green energy sources, but ballooning costs have led to calls for cuts to feed-in tariffs and for industry to pay more. "Dealing with the renewable energy reform is the most urgent of the energy topics, in my view."

The costs of start-up financing for green energy and the compensation for expansion of the power grid are added to customers' electricity bills in the form of a special tax. The entire subsidy system is supposed to come to an end when green energy becomes competitive. That, at least, is the theory. But the reality is different. No longer can one simply describe the tax as a way to get renewable energies off the ground. Indeed, following Berlin's decision two years ago to shelve nuclear energy and accelerate the expansion of renewables, the EEG has become a giant redistribution machine.

Shortly after a blade came loose at the Ocotillo Express Wind facility in Imperial County earlier this month, facility operator Pattern Energy deftly handed the matter off to turbine builder Siemens Energy. With a muted press statement issued Friday, it looks as though Siemens is now trying to pass the buck as well.

Germany's push for wind and solar and its retreat from nuclear power is driving electricity costs to untenable levels and destroying support for the green agenda, the International Energy Agency (IEA) has warned.

Germany must shield its consumers from paying too much of the cost of its ambitious switch from nuclear power and fossil fuels towards renewable energy, the International Energy Agency said on Friday. The IEA also said that Germany, with Europe's biggest economy, should make greater use of natural gas to smoothe the transition.

"That means that German companies are bound to invest a lot more in the US," Grillo commented. Energy-intensive firms like Wacker and BASF speak of clear competitive advantages in the US, with the first already building a production facility in Tennessee.

There has also been a resurgence of cheap coal, considered a dirtier energy source, abetted by a market failure in the European carbon emission trade. An oversupply in the right-to-pollute certificates has seen their price fall from an envisioned 15-18 euros per tonne of CO2 to just two to three euros -- making coal plants an economically attractive option once more.

Germany is burning more coal because gas plants are not economical, subsidies for renewables are pushing up power prices, and a greater share of fluctuating renewables threaten the stability of electrical grids, Michael Suess, chief executive officer of Siemens Energy, said.

Germany's green energy drive is proving surprisingly good for dirty brown coal as utilities squeezed by rival renewables and low wholesale gas prices use more of it.

The success of the turnaround is not only to be evaluated after the volume of the installed solar and wind capacity but also if the energy supply remains safe and affordable, he added.

That the German government is facing a massive budget shortfall for projects aimed at transforming the country into a model of alternative energy and environmental friendliness is hardly new. The European cap-and-trade system has for months been sliding into inconsequence as prices for CO2 emissions have stubbornly remained below €5 ($6.47) per ton.

But six months before a federal election, questions remain, not least how to pay for the shift. Consumers are wary about the extent to which they will foot the bill and Merkel wants to reassure voters that she is trying to curb steep rises in power prices caused in part by subsidies for renewable energy.

Subsidies for renewable-energy producers that are financed in part through household electricity bills are causing electricity prices for ordinary consumers and industry to rise. Germany's biggest industrial power consumers have seen electricity prices per kilowatt hour rise nearly 40% in the past five years.

“The fundamental question is whether we want to push through this crazy 80 percent renewable energy share at the expense of the economy,” said Marc Tenbieg, managing director of the DMB Deutsche Mittelstands-Bund, which represents more than 14,000 small and mid-sized enterprises. “Why do we always have to be the trailblazer and show the other countries how it’s done? They are laughing their heads off.”

Germany plans to exempt 1,550 large firms from a power price surcharge that covers part of the cost of switching to renewable energy. Critics say the list of exemptions is spurious and unfair to households and small businesses. It risks undermining faith in the government's switch to clean power.

Stephan Kohler, the head of the German Energy Agency, says the country must act smarter and more realistically in its transition to renewable energy. The "feel-good" subsidies for locally produced wind and solar power have had unintended consequences, he says, and the environmental movement is often part of the problem.

In total, the network operators hope to collect more than 20 billion euros to subsidise renewable energies. ..."The increase in this charge is manageable for many households, but there are also very poor, low-income households which could be negatively affected by this type of price rise," she said.

The draft bill endorsed by Chancellor Angela Merkel's Cabinet of Ministers would make power consumers pay as much as 0.25 euro cents a kilowatt-hour if wind farm owners can't sell their electricity because of delays in connecting turbines to the grid. The plan is aimed at raising investments after utilities threatened to halt projects.

At issue is the German Renewable Energy Act, which requires power companies to buy wind and solar energy from producers at fixed prices, which are much higher than electricity produced by traditional methods such as coal- and natural gas-fired power plants. At the same time, power-hungry industries receive generous subsidies ...German consumers have to cough up the difference.