Solar Subsidy Sinkhole: Re-Evaluating Germany’s Blind Faith in the Sun
The costs of subsidizing solar electricity have exceeded the 100-billion-euro mark in Germany, but poor results are jeopardizing the country’s transition to renewable energy. The government is struggling to come up with a new concept to promote the inefficient technology in the future.
The Baedeker travel guide is now available in an environmentally-friendly version. The 200-page book, entitled “Germany - Discover Renewable Energy,” lists the sights of the solar age: the solar café in Kirchzarten, the solar golf course in Bad Saulgau, the light tower in Solingen and the “Alster Sun” in Hamburg, possibly the largest solar boat in the world.
The only thing that’s missing at the moment is sunshine. For weeks now, the 1.1 million solar power systems in Germany have generated almost no electricity. The days are short, the weather is bad and the sky is overcast.
As is so often the case in winter, all solar panels more or less stopped generating electricity at the same time. To avert power shortages, Germany currently has to import large amounts of electricity generated at nuclear power plants in France and the Czech Republic. To offset the temporary loss of solar power, grid operator Tennet resorted to an emergency backup plan, powering up an old oil-fired plant in the Austrian city of Graz.
Solar energy has gone from being the great white hope, to an impediment, to a reliable energy supply. Solar farm operators and homeowners with solar panels on their roofs collected more than €8 billion ($10.2 billion) in subsidies in 2011, but the electricity they generated made up only about 3 percent of the total power supply, and that at unpredictable times.
The distribution networks are not designed to allow tens of thousands of solar panel owners to switch at will between drawing electricity from the grid and feeding power into it. Because there are almost no storage options, the excess energy has to be destroyed at substantial cost. German consumers already complain about having to pay the second-highest electricity prices in Europe.
Solar Industry Facing Tough Economic Times
In the coming weeks, the German government intends to decide how it will treat solar energy in the future. The parliamentary leaders of the ruling center-right Christian Democratic Union (CDU) and the business-friendly Free Democratic Party (FDP) have written Environment Minister Norbert Röttgen a letter asking him to present a new subsidy concept by Jan. 25. Economy Minister Philipp Rösler (FDP) would prefer to abandon the current subsidization system altogether, as would the business wing of the CDU.
The FDP leader, who long ignored the subject of the energy transition, hopes to boost his profile by opposing solar subsidies. Rösler sees an opportunity to demonstrate that he, unlike his fellow cabinet minister Röttgen, has an understanding of economics, especially as he knows that many in the CDU, and its Bavarian sister party, the Christian Social Union (CSU), agree with him.
CDU deputy parliamentary floor leader Michael Fuchs has sharply attacked his fellow party member Röttgen. He holds the minister personally responsible for the rising cost of electricity. But Röttgen is fighting back. This week, he will meet with representatives of the solar industry, which faces tough economic times as a result of competition from China. Röttgen fears that fewer subsidies could put more German solar panel producers out of business.
The dispute over solar energy has the potential to widen divisions within an already shaky coalition. For many liberals and CDU/CSU politicians, the problems with solar subsidies are a symbol of mismanagement in the energy transition. Chancellor Angela Merkel’s plan to finally set aside a conflict over nuclear energy that has been raging for years and develop new contingents of voters for conservative politicians is proving to be an economic failure.