The Spanish Government have announced that they are to slash their subsidy to solar power by a staggering 30% in 2011, a move which is expected to save them around 750 million euro.

The decision has caused anger reaction among investors in the country’s solar projects, who argue that the cut could cause loan defaults that would exacerbate the problems facing many European banks, rather than easing the financial burden on the country.

Last year the Spanish government placed a cap on the amount of solar power that would be subsidized, resulting in a revenue and profit drop for all the major suppliers.

The original subsidy plan caused a boom in construction of solar power units which far outweighed the expectations of the government, resulting in the country having some 3,200 megawatts of solar capacity, which equates to more than six times the amount the government had planned on by the end of 2010.

via The Leader