Small-Town Solar Revolution Has Created Jobs Galore & Driven Down Price of Power in Germany

March 19, 201213 years ago Zachary Shahan 6 Comments

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Solar energy policies in Germany have resulted in a jobs boom and have driven down the price of power on the EPEX Power Exchange. More people work in Germany’s solar energy sector than in its coal and nuclear sectors combined. (Don’t tell this year’s GOP candidates — they somehow think clean energy and green jobs is all just talk.) But there’s a lot more to get excited about than just jobs (even though those are pretty sweet).

Solar Energy Is (or Can Be) Community Energy

Solar energy can allow “the little guy” to power the country (well, a lot of little guys). “A small-town energy revolution is going on in Germany, with more than 100 rural communities becoming 100% renewable,” Craig Morris of Renewables International writes. The result? Money for electricity goes back into one’s own community, rather than out to some mega energy company. Even if that electricity were to cost you a bit more, it would go back into services and people in your community who would improve your life in other ways.

“Yes. Germany is replacing central-station plants that can only be run by large corporations with truly distributed renewable power. While Germany’s Big Four utilities make up around three quarters of total power generation, they only own seven percent of green power. Roughly three quarters of renewable power investments have been made by individuals, communities, farmers, and small and midsize enterprises.”

This is how clean energy can help individual citizens, of course, but it’s not necessarily how it’s done everywhere (i.e. in the U.S.).

“The US is slowly switching to renewables, but it is nearly completely shutting out the little guy, with only two percent of installed wind power capacity not owned by giant corporations. And when it comes to solar in the US, almost everything is utility-scale plants. The changes in Germany are driven by the little guy, whereas the renewable industry in the US is controlled by some of the world’s biggest multinational companies.”

Hmm, something to think about.

Solar: Bringing Down Power Prices (or Keeping Them from Going Up Too Fast)

While residential power prices in Germany have gone up in recent years, as solar and wind power have replaced nuclear and coal, there are some obvious reason for that. Most notably, perhaps, is the fact that new power sources are more expensive than existing power sources. No matter what option you use today, a new power plant is going to increase the price of electricity. Arguably, though, nothing compares to wind or solar on this front.

Additionally, since our societies are still quite unable to adequately price the full cost of nuclear and fossil fuels (or, inversely, the true value of solar), we also inadequately account for the societal costs (i.e. health, grid, and environmental costs) solar power reduces when we switch to solar.

BUT, even with those issue noted above, it seems clear that German solar power has reduced the price of power on the EPEX Power Exchange: “green power is actually pushing down the cost of electricity on power exchanges by keeping relatively expensive reserve plants offline. It is estimated that solar alone reduced the price of power on the exchange by 10 percent in 2011.”

Here’s a little more from the BSW-Solar page linked above (translated from German to English using Google Translate):

Solar power lowers the average price at the Power Exchange EPEX by up to ten percent, even at lunch time by up to 40 percent. This is confirmed by a brief study of the Institute for Future Energy Systems (IZES gGmbH), Saarbruecken, which was commissioned by the Federal Association of Solar Industry Association (BSW-Solar). Overall, the effect of price reduction amounts for the year 2011, thus 520 to 840 million euros — the equivalent of a price reduction from four to six euros per megawatt hour. “There is much talk about the cost of solar electricity,” said Carsten Koernig, Chief Executive of BSW-Solar. “The IZES study shows that solar power has already and exculpatory price effects.”

This is something we’ve covered a few times, but I think it’s worth repeating, since so many people don’t get it.

And, increased solar installation has not only reduced the price of power, but it has also (logically) greatly reduced the price of solar (think: economies of scale).

“Since 2006, photovoltaics has become nearly 60 percent cheaper in Germany thanks to feed-in tariffs. Strangely enough, solar is now far less expensive in cloudy Germany than it is in the US. According to one recent estimate, an installed watt of PV cost less than one-half ($2.80) as much in Germany in the third quarter of 2011 as it did in the US ($5.20).”

The bottom line: solar can bring about an electricity revolution (or, as some put it, a democratization of the electric grid) that puts power in the hands of the people (yes, double meaning there) and reduces the price of electricity (or keeps it from rising as high as it could), but that is sure to be fought or avoided by large power companies (as is now happening in Germany and, in a less obvious way, in the U.S.). What can we do about it? Push for programs and policies that support the people, not megacorporations, such as well-written feed-in tariffs and PACE financing.

Solar panels on house in Germany courtesy shutterstock.