NCPA - National Center for Policy Analysis

Germans Cough Up for Solar Subsidies

July 20, 2012

Despite recent turnover in the office of Germany's environment minister, it appears that the country will not change course anytime soon on its extraordinary subsidies for solar power. This revelation comes at the expense of all consumers in the country -- studies have repeatedly concluded that solar power's inherent inefficiencies necessitate higher rates and additional taxes for subsidies, says Der Spiegel (Germany).

  • A new study by Georg Erdmann, professor of energy systems at Berlin's Technical University, says that the latest plans for the country's energy future will saddle consumers with an additional $377 billion in costs for solar power.
  • He predicts that an environmental surcharge known as the EEG contribution, which is already added to German energy bills, will rise sharply.
  • This renewable energy surcharge currently amounts to 3.59 cents per kilowatt hour, and Erdmann's calculations show the EEG contribution jumping to over 10 cents per kilowatt hour.

Such a level of investment would be justifiable if solar power were a reliable source of energy that could effectively replace expenditures in other areas. However, its innate limitations place a veritable cap on its market feasibility.

  • All of Germany's photovoltaic arrays together generate less power than two nuclear reactors (the form of energy that they were largely meant to replace).
  • Further, the German Physical Society finds that the public's understanding of solar power's potential output is grossly misinformed.
  • While solar capacity is often stated in terms of maximum possible production, solar power must wait for optimal conditions (lots of sunshine with the sun directly overhead) for that capacity to be reached.
  • Additionally, while solar cannot fill capacity during non-peak hours of the day, capacity cannot meet solar power's output when conditions are perfect.
  • This on-again-off-again pattern for solar creates a nightmare for those that desire consistent and steady power output.

Even environmentalists within the country are beginning to turn their back on the massive spending on solar, largely out of fear that such spending will come at the expense of more effective renewable energies.

  • Nearly 50 percent of all green energy subsidies go to solar power, which yields only 20 percent of the energy generated by subsidized technology.
  • For the same amount of money, wind produces about five times more energy than solar.

Source: Alexander Neubacher and Catalina Schröder, "Germans Cough Up for Solar Subsidies," Der Spiegel (Germany), July 4, 2012.

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