The Bigger the Better: Germany’s Perspective on Solar Energy Support

Germany is not exactly the sunniest country in the world. The country of gloomy philosophers has “the same solar power potential as dismal Alaska, even worse than rain-soaked Seattle[1].” Nevertheless, Germany has the most surprising records for harnessing solar energy. In June 2014, more than half of Germany’s electricity demand (23.1 gigawatts) came from solar, which was half of the world’s production[2].

All this could happen because Germans really tried hard since decades ago. In 1991, German politicians passed the Erneuerbare Energien Gesetz, or Renewable Energy Sources Act. The solar industry could grow dramatically backed by the legislative support along with considerable efforts in R&D for technology innovation. The costs of solar PV declined as intended, but there have been other costs that mounted. Tax burden, high electricity costs in relation with FITs (Feed-in tariff), and oversupply of solar PV are often cited as the flip side of the country’s solar dominance. In addition, the emergence of new solar powers such as China is threatening German companies; business leaders such as Bosch and Siemens decided to drop solar due to their weaker competitiveness.

Nonetheless, Berlin seems to be calm. According to Ralf Fücks, the president of the Heinrich-Böll-Stiftung, the German Green Party’s political foundation, “the greatest success of the German energy transition was giving a boost to the Chinese solar panel industry,” because it “created the mass market[3].” Indeed, competition heats up in larger markets, thus pulling down the prices; the IRENA found that PV prices have declined 80% since 2008, and the driving factors include economies of scale as well as efficiency improvements[4]. Germany’s efforts persist, as German Chancellor Angela Merkel recently promised India to provide 2 billion euros to support renewable energy including solar PVs. It seems clear that Germany has a wider perspective in pursuing its renewable goals; the bigger markets in the international level would eventually benefit this not-so-sunny nation.



[3] Thomas Friedman, May 2015, “Germany, the Green Superpower,” the New York Times



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