German Solar Fight: Final Round in Sight?

(Solar story updated for LDK's after hours announcement of earnings data)

SAN FRANCISCO, Calif. (TheStreet) -- A final chapter in the long battle over solar feed-in tariff reductions in Germany should come to an end in April, according to an update from FBR Capital Markets' solar research team.

After several months of back and forth between bickering parliamentary factions in Germany, and lobbying efforts from a variety of interested parties linked to solar subsidies, it would seem that everyone would welcome an end to this fractious period for solar companies.

The most important news is that FBR Capital Markets' sources don't expect any major changes from this point forward in the parliamentary process (though we have been down the road of not expecting changes previously).

Next Monday, March 15, the executive board of the two biggest parliamentary power brokers in Germany -- the Christian Democratic Union and Christian Socialist Union -- will meet to discuss and pass the draft amendments of feed-in tariff adjustments, FBR sources in Germany indicate.

The 16% cut for rooftop solar and 11% cut for ground-based solar on contaminated land have already been agreed upon in federal cabinet and by the coalition government in parliament.

FBR noted that the only proposed reduction subject to change at this point is the complete elimination of farmland-based solar. It is still going to happen, but local sources are telling FBR Capital Markets solar research team that there may be "a possible extension of the July 1 phase-out of agricultural land projects as these projects often take longer time to get approved by local authorities and have longer construct timeframe."

First Solar(FSLR) is expected to feel the most pain from this tariff elimination, and therefore, any softening of that pain would benefit the U.S. solar bellwether stock. First Solar's shares have risen this week, from Monday's share price in the range of $109 to over $113.69 at the close on Thursday.

An important element of the feed-in tariff changes that was not evident at the outset of the political fight is expected to move ahead: an accelerated decline in the FIT if 2010 solar installation exceeds 3.5 gigawatts (GW) -- otherwise known as a soft cap on solar.