Germany's Solar Cell Promotion: Dark Clouds on the Horizon
By Hans De Keulenaer / Published on Thu, 2008-06-05 09:35Further reading
By Manuel Frondel et al
This article demonstrates that the large feed-in tariffs currently guaranteed for solar electricity in Germany constitute a subsidization regime that, if extended to 2020, threatens to reach a level comparable to that of German hard coal production, a notoriously outstanding example of misguided political intervention. Yet, as a consequence of the coexistence of the German Renewable Energy Sources Act (EEG) and theEUEmissions Trading Scheme (ETS), the increased use of renewable energy technologies does not imply any additional emission reductions beyond those already achieved by ETS alone. Similarly disappointing is the net employment balance, which is likely to be negative if one takes into account the opportunity cost of this form of solar photovoltaic support. Along the lines of the International Energy Agency (IEA 2007:77), we therefore recommend the immediate and drastic reduction of the magnitude of the feed-in tariffs granted for solar-based electricity. Ultimately, producing electricity on this basis is among the most expensive greenhouse gas abatement options.
Tagged with
Rating
Related content
- - Optimisation of Photovoltaic Plants : Economic Cable Sizing
- - Economic Impact Assessment of Transmission Enhancement Projects
- - Report - Renewables Support Schemes and Grid Integration Policies
- - White Certificates for energy efficiency improvement with energy taxes: A theoretical economic model
- - How will the global crisis influence the renewable energy market?
People who read this also read
Popular content
- - Checklist for the electrical installation in the home
- - Report - Renewables Support Schemes and Grid Integration Policies
- - Virtual earthing electrode
- - What percentage of which car type (total 100%) do you expect in Europe in 2050? And ditto for 2020 and 2030?
- - Intelligent control of network-connected convertors







Comments
A rather dissident voice on solar
By Hans De Keulenaer / Published on Thu, 2008-06-05 9:44This article argues somewhat convincingly that the rationale for solar subsidies in terms of climate change mitigation, employment creation and security of supply improvement is somewhat questionnable.
In terms of economic efficiency, supporting energy efficiency at a fraction of the feed-in tariff could have a much bigger impact. We can only dream what a feed-in tariff of 3-5 c/kWh for energy efficiency measures could do.
The paper however misses one important dimension: the cost reduction effect of technologies as they go through a learning cycle. It is well documented by IEA that these costs go down by 15-20% for each cumulative doubling of output. We hope that the PV technology platform, assisted a.o. by these subsidies, achieves its cost and efficiency targets.
Allocation of the solar subsidy among these 4 impacts (climate, jobs, security and learning) is virtually impossible. Time will tell whether they were efficient and effective. Meanwhile, these subsidies embed a political choice.
Reply
The next thing is the
By Andy Kuehl / Published on Thu, 2008-06-05 16:54 The next thing is the progress in technology. In the last few years solar technology made such a big progress. This would not have been possible without the growing pv-market in germany. But it is no doubt that prices have to sink towards grid-parity.Reply