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Solar Policy: Back To The (Pre)Solar Future?

Posted by on Friday, January 6, 2012 · 2 Comments 

I wonder what has happened in Germany. Have some in their government gone through an odd black hole and gone back in time? That’s the only thing I can think of to justify the decision of the economy minister to come out in favor of cutting solar subsidies in such a drastic fashion (something the environmental minister, predictably, opposes).

What baffles me about this apparent change in policy is that the subsidies helped build Germany into one of the leading countries in the world for solar power generation. According to the article, they were the leading country in the world, in fact, until subsidy cuts last year endangered its place atop the world (and putting Italy in the running to be first).

The tensions described in the article are nothing compared to the tensions that are fast becoming apparent in the U.S. industry, but it does say something about the power of more traditional power sources that even in Germany, these cuts are being debated. I’ve made it clear before that I am in favor of subsidies in the United States, and I’ve made no secret of the fact that I believe subsidies are still necessary around the globe as the industry matures (if we can do it for oil and gas industry, why not solar?).

But the most disturbing part of the article is this paragraph from the economy minister:

[Economy Minister Philipp] Roesler said the German energy overhaul will require investments in new gas- and coal-fired power plants as well as about 4,500 kilometers (2,800 miles) of power lines. If done correctly, the plan offers “lots of new chances for growth,” he said.

Really? After making all this progress on renewable energies, going backwards to the nonrenewable, dirty technologies of the past is a good idea? Really?

To me, the outcome of the debate in Germany could have far-reaching implications for the industry worldwide and especially for the industry here in the United States. I’m personally rooting for the CDU to come out on top in this fight and block the severe cuts in subsidies that the Economy Minister is suggesting.

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About Frank Andorka
Frank Andorka brings 15 years of trade publication experience to Solar Power World. His most recent stop prior to Solar Power World was IndustryWeek, where he wrote about renewable energy and technology. He has two children and a wonderful wife, and lives in South Euclid, Ohio.


  • Brian Ballek

    Two bits of background may help put Minister Roesler’s statements in perspective. Firstly the Ministry of Economy has been openly partisan against renewables for quite some time. The renewable energy industry must regularly take them to task for blatantly miscontruing fact and then misinforming the public. A characteristic example is the insistence of the economic ministry on publicizing the COSTS of subsidies without weighing against them the BENEFITS brought about by the “merit order effect”.

    The second thing worth noting is that Germany’s subsidies, while effective and IMHO excellent public policy, do not flow evenly from state to state. German states that produce a lot of renewable power get a net inflow of capital into their economies. States like Bavaria that do so with lots of solar power, get LARGE net inflows of capital because subsidies for solar are (still) so high compared to onshore wind power. And then there is Nordrhein Westphalia — coal country — which uses lots of electricity (and pays the RE surcharge that finances the subsidy program) but produces next to ZERO kWh with renewable sources. So they are stuck with HUGE capital OUTFLOWS. This infuriates them and their powerful coal lobbyists, who are well represented at the Ministry of the Economy.

    NOTE members of German Parliament can and do perfectly legally sit on the boards of advisors of major corporations. About a third of them serve on the boards of energy companies including coal producers.

    So when you see statements like this from the Ministry of the Economy, just realize that it isn’t about long term public policy and the greatest good for the greatest number; it’s about short-term economics.

  • http://www.solarpowerworldonline.com Frank Andorka

    Brian:

    Thanks for your insightful comments. It really helps clarify the issues for me.

 

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