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Germany battles over the future of solar energy - Page 2

Germany

Germany battles over the future of solar energy

Germany politicians try to reign in the struggling solar industry.

also in Roettgen and Chancellor Angella Merkel’s party — who sympathize with his view.

Roesler’s position is supported by the pro-industry Rhine-Westphalia Institute for Economic Research, or RWI, which has calculated that solar panels installed in Germany between 2000 and 2011 will cost consumers a staggering 100 billion euros ($130 billion) over 20 years.

“The most important reason to cut the solar subsidies is that from an economic perspective, they are simply a waste of money,” RWI expert Manuel Frondel told GlobalPost. “We estimate that the average German household will have to pay 1,000 euros over the next 20 years as a result of the photovoltaic panels installed in Germany up to now.”

Frondel said that the attraction of installing solar panels has to be urgently reduced. “Otherwise the costs for the energy consumer will continue to rise massively.”

He points out that wind power is far cheaper to produce than solar, and suggests an alternative quota system for green technology would see utility companies opting for wind over solar.

Keeping the solar industry on life support with ongoing tariffs is pointless, Frondel said. “Many of these companies are facing bankruptcy. And of course one could delay their demise for a while by continuing subsidization, whereby the energy consumer pays high subsidies for solar energy, but it makes no sense from an economic point of view. You cannot prevent the collapse of the German solar industry.”

This view is forcefully opposed by Germany’s strong ecological movement, which sees solar as a vital part of Germany’s energy mix.

Capping installation or abolishing subsidies would “bring to a standstill the switch to clean-energy sources,” the BEE Renewable Energy lobby and its green movement allies wrote to the chancellor in late January.

Companies that have invested heavily in solar are deeply concerned with the push from the Economics Ministry. An installation cap would mean “photovoltaic is dead in Germany,” said Franz Fehrenbach, CEO of Robert Bosch, the German car-parts supplier that has branched out into the solar industry in recent years.

For environmentalists, the fact that Roesler wants to kill off the support is incomprehensible. “It is as if we sowed seeds and plants grew and finally started bearing fruit and then shortly before the fruit was ripe, they come with their tractors and mowed them down,” said Gerd Rosenkranz of the non-profit German Environmental Aid.

Rosenkranz admits that solar power has been expensive but argues that most surveys have shown green-conscious Germans are happy to pay a bit more for green technology if it helps the environment. And while the figure of 100 billion euros may seem massive, he points out that this is spread over 20 years for the whole population. “It is not actually that dramatic, which is why people are not rebelling against it.”

He argues that the FITs enabled the German solar industry to eventually produce much cheaper panels, something that benefits not just Germany but the world, as it fights climate change.

“We cannot change the fact that it was expensive in the past, but what is coming now is not as costly,” Rosenkranz said. Cutting off the subsidies at this point, however, would help kill off an industry that is on the cusp of being viable without FITs, he said, adding that setting an installation cap just as Germany abandons nuclear power, is simply “not logical."

And while wind is cheaper than solar, there is currently insufficient infrastructure in Germany to get the energy from the coast to the rest of the country, whereas solar panels can be installed anywhere.

Solar is now on target to make up around 10 percent of the energy mix by 2020. Yet, even with the flood of cheap Chinese solar panels, that development could be put in jeopardy if much of the industry in Germany is allowed to collapse, environmentalists say.

Even solar supporters admit that many companies became lazy on the back of the subsidies and did not invest enough in R&D. “Whenever there is such rapid development then there is going to be a phase of consolidation, during which some companies fail,” Rosenkranz said. “That is terrible for the owners and the employees but that is something that always happens when developments are so fast.”

The companies that remain are dealing with constant uncertainty, awaiting the result of the political wrangling in Berlin. They complain that the constant tinkering with the system makes it difficult to plan or invest.

“It would be crazy if an industry which has been developed with the money of many citizens is driven to the wall before it can really be economically viable,” Rosenkranz said. “It would really be the dumbest thing Germany could do.” 

http://www.globalpost.com/dispatch/news/regions/europe/germany/120217/germany-battles-over-the-future-solar-energy