BERLIN: German Chancellor Angela Merkel's cabinet has approved a reform of the renewable energy law, a government source said on Tuesday, aimed at curbing a rise in the cost of power in Europe's biggest economy linked to the rapid expansion of green energy.

The long-awaited reform will slow the expansion of green power, which accounts for 25 percent of Germany's electricity, force new investors in green power to take some risk and aims to protect households from bearing the brunt of future cost rises by forcing industry to pay more. It is due to become law in August.