NEW YORK ( TheStreet) -- Germany's parliament has proposed a compromise over support for solar energy, a 3% lessening in feed-in tariffs scheduled to take effect this month, but this gift to the solar industry should only last three months. The agreement between the lower and upper houses of German parliament puts the Germany government on schedule to take a final vote on the solar subsidy scheme on Thursday. The solar subsidy changes were scheduled to take effect on July 1, but a last-minute battle between the upper and lower houses of Germany's parliament delayed the introduction of the lower feed-in tariffs. The latest reports out of Germany indicate that, as expected, the feed-in tariff reductions will be retroactive to July 1, once implemented. The 3% "gift" being given for the first three month of the new German feed-in tariff program was being viewed as a minor positive for solar companies, and only so far as projects completed in the next three months will be able to achieve a higher rate of return. The feed-in tariff for rooftop systems will be 13% for the next three months, before being reduced starting October by the 16% originally proposed by the parliament. Ground-mounted solar projects will initially have feed-in tariffs reduced by 12%, before moving up to the 15% reduction in three months. Solar projects on contaminated lands will initially have feed-in tariffs reduced by 8%, before the full 11% reduction is implemented In October. Collins Stewart analyst Dan Ries wrote in a report on Tuesday morning that the securities firm did not anticipate the 3% feed-in tariff gift would have a significant impact on German solar demand trends. "The German market had been expecting the 16% rooftop cut on July 1, so the revision is a minor positive to the months of July, August and September 2010, but no impact to subsequent periods. Our checks with German system integrators continue to show them to be sold out through August for small systems and September for large roof top systems.... As such, we do not believe the 3 month delay (for the final 3% reduction) will have a meaningful positive impact on demand. Solar shares opened higher on Tuesday morning, mirroring the trading sentiment to start the week in the broader equity markets.
German solar shares were higher in European trading on Tuesday, led by German solar company SMA Solar Technology, up more than 15% after it raised in 2010 sales guidance. Writing on the strong demand in Germany -- and the muted impact of the latest news regarding the solar subsidy cuts -- Collins Stewart analyst Ries noted on Tuesday that taking into account the 16% reduction in support for rooftop solar projects in Germany, FITs will be reduced 30% over the past three years, versus a reduction of 57% in the cost of solar manufacturing for the lowest-cost solar companies. JA Solar ( JASO) was up the most of the solar stocks on Tuesday morning, after it announced a deal with MEMC Electronics to supply the U.S. solar project developer with solar modules, with shares of the Chinese solar stock up 8%. Trading in other solar shares was positive, but reflected the general upswing in the markets to start the week coming out of the July 4 holiday. The leading U.S. and Chinese solar module makers, First Solar ( FSLR) and Trina Solar ( TSL) were up between 3% and 4% to start trading on Tuesday. With the Nasdaq up more than 1.5% to start trading on Tuesday, a rise of 3% in solar stocks was a typical spike. -- Written by Eric Rosenbaum from New York. Follow TheStreet.com on Twitter and become a fan on Facebook.