Clean Power solar energy versus solar power costs

Published on March 2nd, 2012 | by Zachary Shahan


10 Huge German Solar Energy Myths Bjørn Lomborg is Trumpeting

March 2nd, 2012 by  

No doubt, you’ve heard about Germany’s likely decision to quickly and severely cut its solar PV feed-in tariff policy, a world-leading solar policy that has made Germany a solar power hero of sorts. A friend recently shared a story by Bjørn Lomborg on these cuts with me and asked me for my opinion. It’s taken me a few days to get to it because Lomborg’s piece is so full of myths and lies, but before I get to debunking Lomborg’s claims, let’s have a little context.

Who is Bjørn Lomborg?

Lomborg is infamous for denying the need for clean energy action to stop human-caused global warming, and for claiming that scientists’ concerns about global warming are overblown.

Lomborg has flipped and flopped a bit in the past few years, but he has stuck to his completely odd idea that deploying clean energy now isn’t the best way of responding to global warming (again, going against a large consensus on the matter by experts in the field).

Unfortunately, for Lomborg, the Danish government recently announced that it was cutting $1.6 million in funding for his “Copenhagen Consensus Center” —  “It’s been very strange that particular researchers have received special treatment due to ideology. We’re going to run fiscal policy differently,” said Ida Auken of the Socialist People’s Party at the time.

Now, onto the matter of the day, Lomborg’s recent claims (read: myths and lies) about solar energy in the midst of Germany’s move to scale back its solar PV subsidy policy….

Germany Solar Feed-in Tariff Cut

There are a handful of reasons why Germany is cutting its solar feed-in tariff policy so quickly and dramatically. As Susan noted the other day, though, the big one is that it cuts into rich and influential utility companies’ bottom lines. It’s also related to the extremely fast and unpredicted drop in the cost of solar PV panels, but it’s really mostly because of the effect that is having on the utilities.

“New solar installations of a record 7.5 GW in 2011, far outpacing the country’s 2.5 to 3.5 GW plans, have cut into the business model of German utilities,” as Susan notes.

“Increasing the amount of solar power on the grid has actually lowered peak electricity prices (How the merit order effect works) but it has generated a backlash among German utilities, who are having their bottom line hurt by solar competition….”

But, his has already been covered in more depth (a few times here on CleanTechnica) so let’s just get on to the Lomborg myths.

Note: because I’d rather not drill the myths into your head, I’m leading with the most important (accurate) point related to each myth.

1. Solar PV reduces the price of electricity (or keeps it lower than it would be otherwise). Lomborg makes the claim that Germany’s increase in solar PV is going to result in a massive spike in electricity bills.

First of all, we’ve written on the documented evidence that solar PV reduces electricity bills, since it produces the most electricity at peak demand when baseload power is already stretched and producing new electricity costs the most. (Aside from Susan’s piece from this week linked above, I wrote about how solar PV reduces the price of electricity on February 9th and John Farrell posted a piece on it again on February 13th — I don’t think Lomborg caught either of those.)

The same thing happens with wind power, which is even cheaper than solar today, as I’ve documented here. (Note, again, that Lomborg isn’t a fan of wind energy either — basically, he’s just not a fan of deploying clean energy.)

Now, as implied above, utility companies’ inability to charge more than a pretty penny for peak electricity (since homes are now providing it themselves) might very well be hurting their profits. But should energy policy be about making sure traditional, rich utility companies make a hefty profit, or should it be about what’s best for the citizenry?  (Tough one, I know… if you’re a politician.)

2. Solar power is already cheaper than fossil fuels and nuclear. Solar’s levelized cost of electricity (LCOE) may not be, and if that’s the only thing that matters to Lomborg, his claim that solar is more expensive than coal, natural gas, or nuclear, might be right. However, if you look at a couple of important factors, solar is already cheaper.

First, I know folks like Lomborg don’t like to do this, but if you take the true cost of all energy sources into account (including health costs not included in the LCOE), solar is already cost-competitive (and subsidies to support solar adjust for failures in the market that leave out those important externalities).

Furthermore, if people actually evaluated the price of solar based on the true lifespan of solar power systems, the situation gets even better. If you do this and even continue to leave out externalities like health costs, solar is already cost-competitive in many or most regions.

But we’re not done yet! As discussed on our solar energy page, the projected cost of solar in a few years is already lower than coal and nuclear at that time. And the important but often overlooked point here is that it takes years to get a new coal or nuclear power plant up and running. So, by the time you had a new plant up and running, the electricity from it would already be more expensive than the projected price of solar at that time (and note that solar prices have been falling faster than anyone predicted in previous years). Here are two images and a video on this matter from our Solar Power page (linked above):

solar energy versus solar power costs

3. Solar doesn’t work at night (for the most part) — who cares?! Lomborg focuses a little on solar not working at night (solar PV, that is). Yes, solar doesn’t produce electricity at night, and the water doesn’t come out of the shower head when I turn the shower off — no problem. Wind is often more abundant at night, so mixing wind and solar works well (which Germany and anyplace with much clean energy does). Additionally, as noted above, peak demand isn’t at night, and what solar is most useful for (at the moment) is covering peak demand. Aside from wind, there are many other ways to fill in at night when needed, but the bottom line is that diversity is key, and no one is ever going to try power a country 100% from solar (at least not in the near future), so this is really a completely moot point.

4. Solar power from Germany is sometimes exported and electricity from other power sources is sometimes imported. Lomborg makes a fuss about power from other countries sometimes needing to be imported when solar power production is low. This need is not unique to solar, though, and isn’t really an issue. As I noted about a month ago, Germany’s abundant solar power helped to save France’s butt when it got really cold in France and nuclear power production dipped. The key, again, is a good diversity of energy sources, a good grid, and good planning. Solar is actually very flexible, one of its strengths, unlike nuclear and coal baseload power that takes ages to start up (sometimes days) and can actually really “get in the way” as a result of that, as the article linked above notes. Solar’s intermittency is not a problem at this level of integration and it’s not likely to be any time soon (if ever). But why not knock a potential weakness while we have the chance — right, Lomborg?

5. Solar PV drives electricity bills down. Again, Lomborg comes back to the claim that solar is going to wildly drive up consumer electricity bills. The key to spreading a myth is pounding it into you head, you know? As described above, solar PV drives down the price of electricity. In the medium- to long-long run, solar installed today is clearly a cost-effective solution to new power production. And, of course, if you put solar on your home, the better off you are!

6. The cost of global warming inaction is MUCH greater than the cost of strong global warming action now. As noted the other day, a new study by former Microsoft executive Nathan Myhrvold and climate scientist Ken Caldeira finds that we need a 100% shift to truly clean energy now in order to avert serious climate consequences in the second half of this century (the climate consequences of the coming decades from previous emissions are basically already locked into place).

Bill Gates and U.S. Energy Secretary Steven Chu emphasized basically the same thing this week at the ARPA-E 2012 summit.

Perhaps more importantly, for countering Lomborg’s claim that the cost of global warming action and clean energy deployment today is too expensive for us (that it’s more expensive than not acting), Yale economist has shown that the cost of climate inaction is MUCH greater than the cost of action. Here’s a chart on his findings:

climate change action costs climate change inaction costs

Others have come to the same finding. Lomborg’s claims to the contrary, without any supporting evidence, are just plain untrue.

6.5. Clean energy deployment today is a MUST in order to address global warming. Woops, I jumped the gun a bit. Debunking Lomborg’s claim that “focus first on increasing research and development to make green-energy technology cheaper and more competitive,” much of what was included in the point above is again relevant. We need action now, not in 10 years. However, even beyond that, this R&D to cut costs, not deployment, is a false choice. Firstly, deployment is one of the best ways to get costs down. Solar prices dropped off a cliff in the last year, and have for years, largely due to increased demand and deployment. This creates better economies of scale and also stimulates private sector innovation. Furthermore, we don’t need one or the other, but both. We need continued R&D, but certainly not at the expense of extremely effective policies stimulating clean energy installation around the world.

7. Germany’s solar policy has been a wild success. One of the most ridiculous claims Lomborg makes, perhaps, is that “Germany’s experiment with subsidizing inefficient solar technology has failed.” If anything, the policy has been so successful that it may need a bit of restructuring. Again, as Susan noted: “New solar installations of a record 7.5 GW in 2011, far outpacing the country’s 2.5 to 3.5 GW plans.” There’s a reason why countries around the world have gone the same route as Germany — the policy has been a wild success.

8. Today, we should try to reduce price of solar PV, first and foremost, with rapid deployment. Woops, I jumped the gun again. The main summary of why deployment is critical to further reducing the price of solar, not just R&D, is above. Basically, we’ve got the technologies to the point we need to produce them at a cost-competitive level, and the best way to further bring down the costs is with deployment. This is the route Google has now gone, and this is the route advised by studies and analysts. Of course, as stated multiple times above, not ignoring R&D, but not ignoring the potential from deployment either.

9. Solar produces green jobs. Lomborg uses the following quote as an absurd scare tactic: “many ‘green jobs’ are being exported to China, meaning that Europeans subsidize Chinese jobs.” Yikes, China is getting jobs out of a German solar energy boom, oh no! The fact of the matter is, this fast-growing solar industry is creating jobs around the world. The U.S. now has over 100,000 jobs from the solar energy industry. Germany has even more. The EU has over 1 million jobs in the clean energy arena. One of the really nice things about solar is that it creates a ton of jobs for local, small business. Solar installation and maintenance is, surely, giving Germany a huge jobs boost. Killing solar policies might take away some Chinese jobs (if that’s your main aim… and why should it be?), but it will also take away good jobs for Germans.

10. Germany’s solar energy growth is having a tremendous, positive impact on COemissions. It’s so off point, I almost don’t even want to share this quote from Lomborg, but for the sake of debunking it, here it is: “the actual effect of extra solar panels in Germany leads to no CO2 reductions, because total emissions are already capped…. Germans simply allow other parts of the EU to emit more CO2.How are you going to cut CO2 emissions if you don’t deploy clean energy?! Seriously, I think this claim takes the cake. Yes, policies are in place that require cutting emissions, and solar PV in Germany helps to hit those targets. Without solar in Germany, that would certainly be harder, and hey, it might not even happen. But Lomborg seems to think that it magically happens without doing anything and, so, doing something is counterproductive. Got that? Furthermore, there’s a huge push in the EU now to considerably raise its emissions reductions target (from 20% by 2020 to 30% by 2020), something that a recent study found would save the EU money. Certainly, such an improved target wouldn’t be possible, let alone talked about, if countries like Germany hadn’t aggressively reduced emissions ahead of schedule!

All in all, Lomborg tries to scare the reader (probably successfully in most cases) with big number that have no context and gross claims that the average reader wouldn’t know are just plain false. It’s a disservice to society, a disservice to Germany, and a disservice to generations to come that might have to live with the consequences if Lomborg (and friends) influence enough people.


To reiterate, as Giles Parkinson of REneweconomy writes, the German solar PV subsidy cut is “not so much because of the problems of trying to match a tariff rate with the plunging costs of solar, or the potential cost of consumers, but because solar PV is starting to create a large hole in the business models of the conventional power industry.”

Furthermore, “prices in peak power periods in the middle of the afternoon on sunny days are running lower than base power prices of 2am.” (In other words, electricity is now cheaper when it has traditionally been least expensive than it is when it should be least expensive.)

And: “The merit order impact was detailed in a recent study by IZES, which found that solar power has reduced the price of electricity on the EPEX exchange by up to 40 percent in the early afternoon when the most solar power is generated. This causes massive problems for generators of conventional power, who rely on increases in peak power prices to deliver their profit margins.”


Some quick details on the German solar subsidy cuts from James Montgomery of Renewable Energy World: “The newly proposed subsidies cut the FiT levels by up to 30 percent, limit the payback on electricity produced, and eliminate a self-consumption bonus. They also take effect on Jan. 2013 but apply to everything installed by March 9, not April 1 as many had thought. (The previous FiT structure would have cut the levels by another 15 percent in July.)”


Read Lomborg’s myths in full on Slate (if you are masochistic or curious enough).

Bjørn Lomborg image modified from image by anabananasplit.

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About the Author

is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.

  • Lomborg is actually right that solar itself does free up CO2 emissions for other polluters to use. HOWEVER, solar deployment will remove a lot of the demand to pollute and will remove political pressure to keep cap levels high. In the long run, using solar makes it a lot easier for the government to lower the cap. There are other economic benefits as well.

  • Bjorn Lomborg is either the Beneficiary of Funding by the interested group or he is Obstinate Person (one who holds no opinion but they hold him). He is better ignored.

    • Yeah, i generally do. But his posts were going out on mainstream media networks on this, and even had people asking me about what i thought.

  • Tera

    You really have no idea about any renewable energy class. Obsession obviously does not help.

  • anderlan

    I’m not sure how much more transparent Lomborg can get in his shilling for the fossil industry. Delaying deployment and investing in R&D is delaying market share and profit loss for fossil fuel companies and wasting taxpayer money in the meantime. For Lomborg never advocates taking money from old energy to invest in new tech R&D, but taking money from general taxpayer funds.

  • Bill_Woods

    “… the documented evidence that solar PV reduces electricity bills, …”

    There seems to be a range of opinion about that.

    The price of electricity is moving in only one direction: steeply up. For the Krefeld plant, the cost of a kilowatt hour of electricity has tripled since 2000.

    According to a recent survey by the DIHK, almost one in five industrial companies plans to shift capacities abroad — or has already done so. The study also finds that almost 60 percent fear power outages or voltage fluctuations in the power grid, because wind and solar power are still too unreliable.,1518,816669,00.html

    Or maybe not. According to the first graph of the IZES study, 2011 prices were substantially higher than 2007 prices — 50-60 E/MW-h vs. 30-40 E/MW-h.

    “Additionally, as noted above, peak demand isn’t at night, and what solar is most useful for (at the moment) is covering peak demand. …”

    According to ENTSOE, peak demand in 2011 was in the evening during the winter months, over 80 GW, of which roughly 0% was provided by solar. In the summer months, demand peaked in midday at about 75 GW; solar was a pretty good match for that. Given the seasonal variation, it’s probably a mistake to lump the whole year together.

    “Solar power from Germany is sometimes exported and electricity from other power sources is sometimes imported.”

    I was surprised to find that Germany exports power in the winter, despite higher demand around the clock — about 3 TW-h per month, net. In the summer, imports and exports are balanced. (Or were until last year, when its net exports were down about 1 TW-h/month after March.)

    “Germany’s solar policy has been a wild success.”

    If the goal of the policy is to get large amounts of solar capacity, yes. But if the goal is to have “a tremendous, positive impact on CO2 emissions”, not so much.

    In Germany, solar is by far the most inefficient technology among renewable energy sources, and yet it receives the most subsidies. Some 56 percent of all green energy subsidies go to solar systems, which produce only 21 percent of subsidized energy.

    … To avoid a ton of CO2 emissions, one can spend €5 on insulating the roof of an old building, invest €20 in a new gas-fired power plant or sink about €500 into a new solar energy system.

    For a time, it seemed that at least the German solar industry was benefiting from the generous subsidy rates. But the green economic miracle has, in the case of the solar industry, turned out to be a subsidy bubble.,1518,809439,00.html

    • Bob_Wallace

      Let’s simplify…

      ” The price of electricity is moving in only one direction: steeply up. ”
      The price of electricity produced by solar panels is heading down, rapidly.
      Even if solar doesn’t always make electricity cheaper, decreasing the rise in electricity prices is a good thing….

  • Excellent article. I would like to add something to the “sun doesn’t shine at night” part.

    I have thought about that a bit at the occasion of reading this, and came up with another point. Solar peaks at day, when most energy is needed. And it also peaks in summer (in places where there are differences between the seasons).

    Now, remember that with global warming, winters will on average become milder and summers hotter. The last winter was mild in Europe as well as in the U.S., leaving natural gas reserves full and prices low as a consequence.

    That of course means that one would want to peak solar in summer rather than in winter, as it helps to deal with added demand from global warming, as opposed to peaking in seasons where energy demand will go down as a consequence.

    And air conditioning in summer will always be most necessary when there is much sun.

    • Bob_Wallace

      Good points. Let me copy this over – it’s from a talk on the smart grid made by Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission.

      “A Day in the Life of the Grid

      July 21, 2011 is a day that will live in infamy.

      Not really. But it was the hottest day of the year in the Midwest and the Midwest Independent System Operator (MISO) territory, which spans 13 states, has 140,000 megawatts of generation under its control, and sells $27 billion of electricity per year.

      And on this particular day in July, the region would experience a new peak of 104 gigawatts.

      Wellinghoff gave an hour-by-hour status of the MISO region with imaging help from ABB’s Ventyx Velocity software. He looked at the impact on big-box stores, aluminum smelters, data centers, and electric vehicle charging. He noted that consumers are paying $0.09 per kilowatt-hour despite the wholesale rate ranging from $0.00 to $1.00 per kilowatt-hour.

      2:00 a.m.: Despite low energy prices across the region, there is no rate incentive for consumers to charge their electric vehicles at this time of day. Electric vehicles could provide regulation service — if they could participate in the market, according to Wellinghoff.

      3:00 a.m.: Prices are near zero.

      4:00 a.m.: Wind resources are still trapped in the western portion of the region because of transmission issues. The average wholesale energy price is about $0.023 cents per kilowatt-hour. At this time, an EV could charge at 40 cents per gallon gasoline equivalent, according to Wellinghoff.

      5:00 a.m.: People in Detroit are waking up, and as power ramps up, pricing starts to rise.

      7:00 a.m.: Wind starts to ramp.

      8:00 a.m.: Trapped wind prices rise in constrained areas, but 100 miles away, prices are 10 cents per kilowatt-hour. The grid has generators inefficiently ramping-up when it would be more efficient for customers to change their loads. Wellinghoff said that this is an inefficient way of operating the grid.

      9:00 a.m.: MISO declares a maximum energy event.

      9:35 a.m.: Frequency on some lines drops to 59.964 cycles.

      10:00 a.m.: Wind “is falling off a cliff” but ramp is rising. Peak wind is 3 gigawatts less than the previous day.

      11:00 a.m.: High prices above $0.10 per kilowatt-hour start to hit the system as imports from PJM dry up.

      12:00 p.m.: The wholesale markets are indicating the true costs of energy but there is a disparity between the wholesale price and the price the customer is paying.

      1:00 p.m.: The temperature is 100 degrees but wind is down to 1 gigawatt. Only 1,800 of 30,000 turbines are producing power.

      2:00 p.m.: Maximum energy warning declared.

      4:00 p.m.: PJM sets an all-time peak record of 160 gigawatts while wind drops to a low point. There is a west-to-east price shift that shows a need for transmission build-out.

      5:00 p.m.: The maximum energy event is terminated, but people are still making energy decisions with no knowledge of real-time electricity pricing.

      6:00 p.m.: Temperatures are starting to cool off in the Midwest and prices have halved.

      7:00 p.m.: Higher temperatures are holding firm in some areas and keeping the supply-demand balance tight.

      8:00 p.m.: The heat index near the Lake Michigan shoreline and in eastern Michigan drops and demand falls.

      9:00 p.m.: Streetlights come on and generating resources go down. MISO brings on more expensive power.

      12:00 a.m.: The system becomes unconstrained as the load continues to drop.”

      The first thing I thought when reading that was “Dude! Where’s your solar?” Hot day and wind goes down, that’s no surprise. However with the upper Midwest’s long summer days solar would be pumping out the power.

      Because they don’t have solar input they are paying as much as $1/kWh to purchase power.

      And take a look at the cost of ‘fueling’ an EV – $0.40/gallon late at night when most EVs would be parked and plugged.

    • Thanks 😀

      Worth noting.

    • Arraysolarenergy

      Id like to add on the “solar doesnt work at night,” comment. Advances in battery technology such as Lithium Air-which ‘small’ companies such as IBM are seriously investing in to reduce their costs and dependence on grid tied electricity for data centres-could solve the problem of power at night. The potential for advanced battery technology to say 1 day of solar creating enough power for 3 days of battery back up is exciting to say the least. Again I point out the fundamental paradigm shift away from energy companies enslaving communities to the big corporate “we pay you” model to the feed in tarriff/net metering from the community “you pay us” Model.

      • Good points.

      • I’d also like to expand this comment:
        Lithium is needed for many next-generation battery technologies; the largest known reserves are in Bolivia, Chile, Argentina, and China, but its relative scarcity may require long-term consideration of large-scale lithium recycling. Some proposed alternatives include replacing batteries with ultracapacitors, which store electricity between charged metal plates instead of between chemicals.
        (This technology would require more research.)

        Another idea I heard for individuals homes would be inertial rather than chemical energy capture: using daytime solar energy to spin massive rotating drums at very high speeds under low-friction conditions, thereby giving the drums enough rotational energy to generate electricity through the night.
        (I think this would be a very cool and interesting shift towards a garage-inventor-style energy grid)

  • Solar is beginning to shock the conventional energy system to it’s core, here in Germany.
    This year the more than 1 million solar power plants (with a combined 23 GWpeak) that are already operational provide eneough energy to keep conventional generation at low nighttime production rates.
    They will start pushing the conventional power plants out of the market and change the system from base-load orientation to renewable orientation..

    Today peakload & baseload prices have been the same, as solar & wind power covered almost the entire daytime increase of demand.

    Thanks Hermann Scheer.
    Unfortunatly we are now in the struggle between:
    -Fast & slow transformation
    -decentralized & centralized renewable generation

  • Arraysolarenergy

    Regardless of whether global warning exists or not, the real issue is what the true benefits of residential solar installations really are? If you dont have to buy electricity from a power company-thats money in your pocket and not theirs. Simple. That money could then be used for other expenses such as medical insurance (so you dont have to rely on state funding) and fresh fruit and vegetables (Therefore avoiding the need to go to the hospital in the first place). As long as installing PV is feasible, right? In New Zealand, once the residential price of electricity reached 33 cents per kw/h a 3 kw/h PV array will pay off 7 years going down (I can elaborate on how I came about this figure). The price has recently gone up to around 26-28 cents per kw/h, so we are nearly there. As it is in the best interest of the government to promote Solar (Green, jobs, security of future supply and residential home owners are also voters), the Government can contribute by legislating the price paid for surplus fed power at 1 for 1 from taxing the profits made by generators, carbon polluters, and lines companies. Therefore, net metering is a more practical promoter of solar than FITs.

  • Bill_Woods

    “Lomborg is infamous for denying global warming’s existence and the fact that it is caused by humans for years, …”

    Excuse me? When did Lomborg ever deny AGW? It’s been a long time, but I remember considerable discussion of it in The Skeptical Environmentalist.

    • Bob_Wallace

      Where did you get the “Lomborg is infamous for denying global…” quote Bill?

      Here’s what I read in the piece above…

      “Lomborg is infamous for denying the need for clean energy action to stop human-caused global warming, and for claiming that scientists’ concerns about global warming are overblown.”

      That’s pretty consistent with everything that I’ve read from him over the years. “Sure, there’s a tiger in the yard, but don’t worry about it. It isn’t likely to eat you.”

      Of course Lomborg’s now changed his tune. He’s now saying that the tiger is likely to eat us. He just doesn’t have the background to tell us how to avoid it. He’s spent so much time trying to defend doing nothing that he’s not kept up with what we need to do.

      • Bill_Woods

        That’s what it used to say. I guess Zachary took my comment under advisement.

        • Thanks, guys. Yes, I corrected that section, but missed replying here.

  • Great article. Thanks for informing the people.

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