Germany has been heralded as the world leader in deployment of solar energy. With its decision to move away from nuclear, renewable energy in Germany has become an even higher priority. The question in Germany as in every other country is what level of support the government should provide as the cost for solar panels continues to decline. The solar industry has been at the cross hairs of the debate this past week on the level of support through feed-in tariffs. Der Spiegel has launched a full-throated attack on the solar energy industry while parliamentarians debate the feed-in tariff. Their deliberations affect the industry far beyond the borders of Germany.
To get a sense of how far in front of the rest of the world the Germany solar industry market is, just take a look at the figures for December. Sure, the United States is the second largest solar energy producer in the world, and sure we installed 1.7 gigawatts of solar panels in 2011. Great, except that if you look at Germany, which installed 2 gigawatts of solar panels in December alone, according to Greentechmedia.
In an article under the byline "Solar Subsidy Sinkhole," Der Spiegel makes a frontal assault on the solar industry in Germany, claiming that "Solar energy has the potential to become the most expensive mistake in German environmental policy." The major beef with the industry is that Germany consumers pay too much for their electricity bills.
The article makes the point that the distribution networks cannot account for the surge in power when the sun is "turned on." According to the article, "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 [$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."
According to Der Spiegel, all German solar energy systems combined "produce less electricity than two nuclear power plants. And even that number is sugarcoated, because solar energy in a relatively cloudy country like Germany has to be backed up with reserve power plants. This leads to a costly, and basically unnecessary, dual structure."
The article is less critical of other renewable energy sources such as wind, hydro or biomass, which, according to the article, are much more efficient and supply many times as much electricity as solar.
And the jobs argument doesn't hold water anymore, argues Der Spiegel. Germany just 7 years ago held an almost 70 percent share of the market, which has now declined to 20 percent. In a highly debatable assertion, "Chinese competitors offer systems of equivalent quality at significantly lower prices. It appears that the subsidies have made the German manufacturers lethargic."
The feed-in tariffs in Germany were expected to be reduced later in the year by as much as 15 percent, but according to Bloomberg the feed-in tariffs in Germany will be reduced every month instead of twice a year currently. If the debate in Germany reflects what may happen in other markets, it promises to be another rollercoaster ride in the solar industry this year.
