Soaring Solar Power Giving Politicians Headaches

“…As a cautionary tale, it’s worth gazing across the north sea. Germany had been subsidising its solar power recklessly. Due to the state guaranteeing the revenues for 20 years, no home owner could put a foot wrong by putting a solar panel on his roof. Green Entrepreneurs like Frank Asbeck, founder of market leader Solarworld, became millionaires – and the costs were rising constantly.

Who had to pay for all that? Mr. Average had to. Each and every kilowatt hour of solar electricity had to be subsidized by the customers, through individual energy bills. So prices rose. Soon, Angela Merkel was facing a severe backlash – by the energy intensive industry which was faced with severely mounting production costs, by the lesser partner in her coalition and by consumer groups. Germany’s political leader gave in soon: last summer, subsidies were cut drastically. …”

Energy in Germany

Despite cuts in subsidies, solar power has been soaring in Germany throughout 2012. According to the industry association BSW-Solar, the energy produced has risen by 45 percent, to 28 billions of kilowatt hours.

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4 thoughts on “Soaring Solar Power Giving Politicians Headaches

  1. Bring on the sun! Such a great trend! Mistake was made with the promise – gotta think through all the results of decisions, not just the one’s you’re excited about. Easier said than done, sometimes.

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    • It is encouraging that there is more attention paid to renewable energy and solar in particular. Advances in grid technology will help speed development, in my opinion.

      This scheme was not well planned and decisions were made without regard to future developments and the total capacity of the existing infrastructure. Solar is great, however, it is only capable of providing a portion of the total energy supply at the best of times, no matter how efficient it becomes.

      We have similar challenges with wind power, for example, it can only supply when and where the wind blows. Thus requiring energy storage to take advantage of off-peak generation, expensive transmission lines, wind towers, generators, etc.

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  2. And once again the law of unintended consequences rises up. I know here in the US we are very suspicious of market intervention everywhere except in those instances where we benefit personally.

    In the solar energy space, the Solyndra debacle has made reasonable support of new energy companies very difficult. I wonder if the west can continue to subsidize the research while outsourcing the production to the east. Through some combination of clean energy & conservation, we have to manage our energy needs in ways that are stable environmentally, politically, and economically.

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    • I have seen this law of unintended consequences in action whenever Building Codes have been changed. Subsidizing industries without reasonable limits and checks is foolish, and ends up costing someone, in the case of Germany the costs are tacked on to rates so the consumer sees no energy savings on the improvements. They should have seen this coming.

      I am not familiar with the Solyndra case, however reading it briefly it makes me ponder if the purchasers of these systems hired professionals to review the specifications and check the system’s operations prior to purchase. A poorly designed system without proper supporting data should be avoided as a rule.

      Globalisation and protectionist policies are problems, to gain markets while protecting one’s own. Manufacturing costs in Asia are cheaper, due to many factors, including cheap labor and electricity. However, it depends on the market. For example, light bulbs require CSA approval to be used legally in North America. The establishment and enforcement of standards and approvals is one method of preventing a glut of substandard product.

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