The amount is so small that the ministry refuses to give the 1994 budget the status of a market stimulation programme, referring to it as a one-off lump sum subsidy. The final sum may even fail to reach DEM 10 million as all federal budgets have been pared by 10%, which may or may not be returned late in 1994 depending on the country's economy.
Legislation for the 1994 programme should have been passed by the end of 1993. It will cover four sectors -- wind energy, solar collectors for heating water, geothermal heating plant and hydro power stations. Administration will be carried out by the Bundesamt für Wirtschaft in Eschborn. Subsidies will only be granted in 1994 for renewable plant which is installed during the year. This presents a considerable challenge to developers. They will have to lodge an application, have it accepted and complete the project within less than a year. In practice this will only be possible if a good part of the preparatory work, in particular licensing procedure, is already complete.
With so little money available, emphasis has been placed on keeping the programme as simple as possible to minimise administrative costs. Where possible, subsidies will be granted per kilowatt of installed capacity instead of as a percentage of project costs. According to information available last month, wind will receive DEM 200/kW, up to a maximum of DEM 100,000. Tried and tested wind turbines in the 450 kW-1 MW range are most likely to be eligible for support.
Hydro projects will probably get DEM 1000/kW, up to a limit of DEM 250,000 and geothermal heat plant will receive 50%, although with just one year available for construction, only modernisation of existing plant will be possible. Solar collectors will probably be granted DEM 250/square metre collector area. The new support programme must be approved by the Commission of the European Union before its introduction.