May 20 (Bloomberg) -- Australia's solar power market may be more than halved by restrictions on rebates introduced by the government last week for the installation of photovoltaic panels, said Conergy Pty, a German-owned supplier of solar panels.

Early indications from distributors show an 80 percent cancellation of solar-system orders due to the ``prohibitive'' cost, Rodger Meads, managing director of the Australian unit of Hamburg-based Conergy AG, said today in an e-mailed statement.

Treasurer Wayne Swan last week said rebates for the installation of solar panels on homes will in future be limited to households with annual taxable incomes of less than A$100,000 ($95,820). The rebates allow a subsidy of as much as A$8,000 for a system costing about A$15,000, Conergy said.

The industry, which benefited from a doubling of the rebate in last year's budget, ``will halve its business overnight, maybe worse,'' Meads said in a telephone interview from Perth. ``This has translated to immediate job losses across the industry.''

It appears the government is transferring funds that were previously supporting solar power toward low-emissions coal-fired power projects, Meads said. Conergy has about 15 percent of the solar-power market in Australia, where it competes against companies including BP Plc's solar unit, Japan's Sharp Corp. and Q-Cells AG, he said.

The government said in the 2008-09 budget the introduction of a means test brings solar power into line with the rebate system for solar hot water heaters. The budget also included A$15.5 million to administer a 20 percent renewable energy target, A$100 million of funding for research and development of solar power, a A$500 million renewable energy fund and a A$500 million Clean Coal Fund to support technologies aimed at reducing greenhouse gas emissions from coal-fired power plants.