Why Solar Power Works In Germany
by Miki Saxon
Today is Blog Action Day and the topic is Climate Change, so I asked Chris Blackman, a strategic consultant who specializes in finding both private and public funding for the green and clean technology sectors, to tell us about a country that has used US-invented technology and incentives to become a global solar leader.
Chris also provides compelling background on a subject that enrages me—sacrificing one limited resource for another.
From Chris…
In 1940 Russell Ohl, a scientist at Bell Labs, invented the photovoltaic cell.
So why is dark, rainy Germany a world leader in installed photovoltaic solar panels and solar manufacturing equipment instead of the US?
I work in the sector and am frankly astonished that anyone would even say the words ‘Germany’ and ‘solar power’ in the same sentence.
Germany became a solar leader by use of a feed-in-tariff. Many panelists at the AlwaysOn going green conference in San Francisco last month derided this promising incentive to encourage the adoption of clean energy technologies.
To learn more I contacted Sebastian Britting, a visiting graduate scholar at Columbia University, who will publish the results of his thesis analyzing all the economic and ecological implications of America emulating Germany’s success implementing this program.
How does a feed-in-tariff work?
Sebastian explained “the utility companies are forced through legislation to accept clean sources of energy generated by individuals, provide access points where the individual can feed the energy into the grid and pay the individual a premium for the energy they have generated.”
Germans quickly latched on to this program because it is a guaranteed source of income. This is clearly demonstrated by the year-on-year increase in solar technology equipment in German homes: 40% for the each of the last three years.
The benefits of adopting feed-in-tariffs in Germany don’t end with personal profit, “Germany created 280,000 new jobs since implementing this incentive and is today at the forefront of innovation in the solar energy industry.”
The same program that rewards customers for generating their own electricity also allows the utilities to reallocate the cost of buying it by spreading it out to all of their customers.
“That price increase was 1.38 [Euro] CENTS per kilowatt in 2008, a price increase of less than five percent.”
Stated another way, the program adds just $1.69 to the average German’s monthly electric bill. The average electricity price increases slightly for everyone but Sebastian emphasizes, “This is not a tax and spinning it as such is attempting to make a deliberate distortion.”
This price increase does not go on forever: “It is temporary and when the newly installed generators pay for themselves which is over a 20 year period, the price increase will phase itself out.”
Tellingly, 97% of all Germany’s solar power is captured using solar photovoltaic (PV) cells. PV is highly efficient under the most stressful conditions offering very little sunlight and little water.
Germany receives about 60% of the sunlight that the United States receives, yet even the brightness of a cloudy day provides enough light for the PV cells to generate electricity.
And since the only water required by PV cells is for cleaning the panels from time to time, a little rain acts as an automatic maid.
America invented this technology, so why haven’t we capitalized and profited from it?
What do you think?
Image credit: Blog Action Day
October 16th, 2009 at 12:51 am
I think that the green-red german goverment from 1998 to 2005, has done a lot to establish the solar energie. Especially the green pary has adduce the right steps to grow this technologie. Tax abatement and advancement training programs have been introduced. Now the new goverment with the big boss Mrs. Merkel continue this work. Merkel is a physicist and she know about the possibilities of development of new technolgies. Also she is arranged ageinst global ecological catastrophe. In the states, the last big boss, was the total apposite of this. Maybe with the new one the things will be better…
October 16th, 2009 at 11:20 am
I am hoping that someday we will be more proactive in using forms of energy that are self renewable. I’m not sure if there is a concentrated effort to keep us using oil and coal or if you really do use more energy to produce energy with the alternatives as some say but I’m still hoping we can find a way to be ‘cleaner’ someday soon!
October 16th, 2009 at 6:24 pm
This is quite interesting, now I want to know a lot more about this. I didn’t know about the German solar energy experience before. Thanks Chris! wish we could implement something like this back home, at the equator (should work just fine, right?).
October 16th, 2009 at 8:18 pm
Thank you everyone who has left a comment to this piece so far.
Walter and Julie, I did end the piece on a pessimistic note and you are completely right, there is everything in the future to look forward to and one such thing is a brighter energy future in the U.S. I must admit that a part of my problem is that I am skeptical about this current government having the fortitude to enact something along the lines of this German incentive program.
I sincerely believe that real change to stem the global climate debacle will not take place unless the government takes the lead by enacting initiatives and policies that will tackle the situation.
Hugo, funny enough that you mention the equator. Of course this technology should work seamlessly along the equator: ample sunlight and no shortage of rain . However, I would imagine that the only problem for countries that lie along this band would be the money: solar panels can already be expensive in some of the richer nations.
But when I think about the fact that many countries in South America have made the decision to provide some form of universal health care, although most are poor, that leads me to believe ‘”where there is a will, there is a way” .
I really like the fact that the German experience has stimulated your mind with regards to your own nation. Yes, I want Americans to think about it but would be thrilled if French, Italians, Costa Ricans and Ecuadorians were all challenging their countries to adopt this German incentive program while adapting it to their local needs and resources.
March 30th, 2010 at 11:11 am
I recently started out building my own solar panels – I utilized some video guides I discovered and it’s working out wonderful!
March 30th, 2010 at 1:35 pm
Hi Brain, I’m jealous! I hope to switch at some point, or at least offset part of my electric usage. Unfortunately, I’m not a D-I-Y at that level.
Thanks for stopping by and sharing what you are doing. Maybe you’ll inspire others.
May 26th, 2011 at 4:42 pm
I just bumped into my interview again :-).
In case someone is interested in the results of a Feed In Tariff for the whole United States, check out http://www.us-energy-future.com
The US doesn´t need new nuclear power, either new coal or gas power plants. Politicians would just have to initiate the plan as described and the US would become the world leader in renewable energies…
May 26th, 2011 at 5:14 pm
Hi Sebastian, Thanks for taking time to post the info here.
How likely are the politicians to do it?
May 27th, 2011 at 1:25 am
Last year at the Energy Conference in Washington (6-7 April 2010), I talked to several people from the Obama Administration. Some days later I interviewed for about 40 minutes Prof. William Hogan of Global Energy Policy at Harvard University.
At the Energy conference they said:
“A carbon tax is much more effective than a Feed In Tariff.”
My answer and my question was “you know that the republicans will never agree to a carbon tax, as it is bad for the industry. A Feed In Tariff is just an incentive, even supporting the industry… So do you have a plan B, in case the republicans prevent the carbon tax legislation?”
They haven´t had a plan B and the carbon tax did not come.
At Harvard, Prof. Hogan was basically saying a Feed In Tariff is interesting, but then he was telling me things like “the attempt to initiate an artificial learning curve should not collide with the fundamental goal of the energy supply and should not be the only goal of an incentive”.
So I asked him for an alternative incentive system. But he did not give me one single suggestion what the US should do to implement renewables within our 40 minutes conversation.
He said again how great my work was, but basically he was not interested in it at all…
I did many more things (talking to other people from the white house, Columbia Professors etc etc). My subjective opinion is:
1. that the US coal / oil / gas industry is far too powerful to not intervene any attempt to initiate such an incentive…
2. At the same time the Obama administration, at least in April 2010, had great goals, but was not trying to find any trade offs from their “best-answer-plans”. I think they were too blind to see, that even if they are in charge, they still live in a democracy where you have to find compromises all the time. And even if the carbon tax might be more efficient, it was obvious that it would fail. At least a Feed In Tariff might would have had a slight chance and as shown in my work it would not be that expensive (thus not crazy inefficient).
By the way: The results in my work would even be better today, as the underlying data is from 2008 and the costs for renewable energy systems decreased a lot the last years, so the rates would be at around 1.5 Cents per kWh at maximum.
For tripling the renewables in the grid, creating over 3 Million Jobs, cleaner air, less health costs, less electricity outages etc etc etc…
I wonder if the americans would be ready to pay 1.5 cents per kWh for all that …? Obviously the politicians think that they are not. But I personally think they would be. Especially because at the end the economy push would give them back those 1.5 Cents easily. (Through lower taxes, lower health care rates etc)
Currently the Obama administration and the republicans do nothing world changing regarding renewables and I don´t see why that should change in the future. Sorry for that…
May 27th, 2011 at 8:33 am
Why am I not surprised?
Thanks, Sebastian, for taking time to respond in detail. I doubt anyone would expec results different from what you describe.