In an effort to contain rising power bills, German Chancellor Angela Merkel’s cabinet supported plans to tax owners of renewable energy plants for use of their own electricity. The proposal would require clean energy plants to pay 70% of the EEG-Umlage, a fee paid by power consumers that renewable energy producers are exempt from at present.

Germany's energy industry association proposed an overhaul of government renewable energy policy to take place after upcoming elections. The proposal would remove the feed-in tariff system and ensure that only renewable energy at an early stage of development would be eligible for premiums over market price, meaning the higher prices would be paid for a much shorter period of time. The industry group has warned that high energy prices, due in large part to the cost of green energy incentives, threaten German industry's competitiveness.

The European Commission announced last week that it would investigate the possibility that Germany's new renewable energy law is leading to misuse of incentives and exemptions. The Commission is responding to business complaints that the nation's shift from nuclear to subsidized renewables is leading to higher costs and jeopardizing growth.

Germany's environment minister announced a plan last week to implement a cap on wind and biomass energy generation support, similar to limitations imposed on the photovoltaic sector. While the minister raised the nation's renewables target to 40 percent of total power by 2020, he said that he planned on implementing regulations similar to the 52,000 megawatt cap on solar support; once that limit is reached by wind and biomass, there will be no price guarantees.

Germany's economy minister called on the European Union to avoid intervening in carbon prices, highlighting controversy over EU regulators' plans to strengthen the market. The minister's comments follow a proposal last month to clarify the right of the bloc’s regulator to delay some auctions of carbon permits as of 2013 to curb oversupply. In addition, earlier this year EU politicians supported a proposal to withhold permits from the market after an overestimation of need led to a price-depressing surplus of 500 million to 1.4 billion permits.

Germany's parliamentary mediation committee approved allowing carbon capture and storage on a test basis last week after a compromise that reduces the scope of the original proposal. Though the technology is costly, the method is seen by some as vital to help power plants meet legally binding climate targets. Many citizen groups have opposed the proposal over fears that carbon dioxide emissions, which can be fatal in high concentrations, may leak and rise to the surface.

In the aftermath of Japan's nuclear crisis, Angela Merkel has begun a shift to move Germany away from nuclear power in efforts that will make the country much more reliant on Russian gas. Germany currently imports about 85 percent of its natural gas and is more reliant on Russia for its energy needs than the European Union as a whole. "So far the public debate in Germany has focused on the desire to exit nuclear energy with little thought being spared as to what is actually going to replace it," said Merkel.

European Union climate chief Connie Hedegaard said that plans to delay some carbon auctions are a short-term tool to tackle oversupply and will be followed by further talks. The measures are meant to boost emissions prices after they sank to a record low last month. Hedegaard called the market "over-flooded" and said that she would aim for a decision by member states on the proposal to review the auction rules by the end of the year. The slumping permit prices have allowed European countries to burn increasing amounts of coal and still meet legally binding targets for carbon emissions.

Germany announced last week that it will not cut its wind subsidies as fast as planned, saying the reduction in feed-in tariffs would remain at one percent rather than going to two percent. The move is designed to continue to make renewables competitive with conventional forms of energy, as faster cuts may have threatened German companies like Nordex and PNE Wind.

Germany generated more than 20 percent of its electricity from renewable sources for the first time in the first half of 2011, according to a report by the German Association of Energy and Water Industries. Solar power increased a total of 76 percent, while the share of wind power increased to 7.5 percent of usage, biomass 5.6 percent, and hydroelectric 3.3 percent. Energy use remained stable, but the share of renewable sources rose from 18.3 to 20.8 percent, continuing toward the nation's goal of 35 percent renewable electricity by 2020.