BERLIN, Dec 7 Reuters Germany39;s budget crisis is threatening planned government support for its domestic solar manufacturers, in what could prove to be the death knell for an industry that was once worldleading but got undercut by cheaper Chinese imports.

Europe39;s biggest economy aims to produce 80 of electricity from renewable sources but has become increasingly dependent on imported components such as solar cells from China.

As part of efforts to reduce reliance on China and boost economic growth, Berlin announced in June plans to support companies that want to establish or expand solar production capacity in Germany.

Some 2.5 billion euros 2.7 billion were envisaged for the programme, half of which was to be provided by the federal government through its climate transformation fund, Carsten Koernig, head of the German solar industry federation BSW, told Reuters.

But last month39;s constitutional court ruling, banning the transfer of some 60 billion euros of unused debt to the climate fund puts those plans in jeopardy.

The judgment from the court basically has put every commitment on hold … It couldn39;t have come at a worst time, an industry source of a solar company that applied for the aid told Reuters.

With the aim of building an annual production capacity of 10 gigawatts GW in Germany, the economy ministry launched a socalled expression of interest process to scout for possible flagship projects and more than two dozen solar hardware firms applied for…