Published on February 9th, 2013 | by Zachary Shahan92
10 Huge Lessons We’ve Learned From Solar Power Success In Germany
February 9th, 2013 by Zachary Shahan
Fox & Friends last week had the apparent bravery (or ill-conceived agenda) to mention Germany’s huge solar power success. We’ve written three articles in response to the Fox & Friends clip:
- Fox News: Can You Get Any More Insane?
- Fox News Fails BIG TIME On Solar Subsidies
- Germany Has More Solar Power Because Everyone Wins
Another article that might help those who have been confused by Fox & Friends is this one (which I’ve been planning to write since September 2012). The fact of the matter is, Germany has had insane success in the solar industry arena. And there’s a lot that we can learn from the country (many other countries have already done so).
1. Feed-in tariffs (aka CLEAN Contracts in the US) can drive solar power growth like nothing else.
Well, maybe there are other things that could drive even stronger growth, but nothing else has done so to date. Germany leads the world in solar in many respects. As of the end of 2011, it had more solar power per capita than any other country, it has more solar power relative to electricity production than any country other than Italy (which has also used FiTs), and it has more solar power per GDP than any country other than the Czech Republic (which also followed Germany’s lead and implemented FiTs). Clearly, Germany and those who have followed with their own FiTs have seen more solar power growth than others. As John Farrell noted back in 2011 (still true today), FiTs have been used for the installation most solar (and wind) power in the world:
And, as noted in the first Fox News article listed at the top, Germany crushes the US (which has not implemented FiTs) in solar power capacity:
- In 2011, Germany had over 80 times more peak solar power compared to electricity demand than the US.
- Germany has over 57 times more solar power per capita than the “Sunshine State,” my home state of Florida.
- Germany has over 21 times more solar power per capita than the US.
- Germany has over 39 times more solar power relative to electricity production than the US.
- Germany has about 24 times more solar power per GDP than the US.
2. A more mature solar power market sells solar power for a much lower price.
Solar panels are a global commodity. Their price is essentially the same all around the world. However, the “soft costs” of a solar power system can vary tremendously. As noted back in June 2012, German solar installations cost a little more than half what US solar installations cost. At that time, German systems were being installed for an average of $2.24 per watt, while US systems were being installed for an average of $4.44 per watt. Now, US systems are probably down to about $4.00 per watt, but German systems are down to about $2.00 per watt.
The good news is, people have studied this, and we have a pretty clear indication of where the costs differ.
As you can see in the charts above, big differences exist in installation labor, customer acquisition, overhead, and supply chain costs. As a market matures and becomes more competitive, those costs come down. (Note: notable solar energy champions in the US have also speculated that US solar tax credits have kept solar power systems artificially high in the US — the argument seems quite logical and comes from someone I greatly trust in this arena.)
3. More streamlined permitting works.
Because solar panels produce electricity, many jurisdictions across the US have all sorts of absurd permitting requirements that treat rooftop solar systems as if they are large-scale power plants or alien monsters that could destroy society. Permitting in the US is expensive (see the ILSR chart above) and takes forever and a day (or, more accurately, an average of two months). As one of our Australian writers noted recently, he was shocked to see the level of bureaucracy applied to simple solar power systems in the US.
Germany has rules about solar panel installations. They work really well. You can get a system installed almost immediately, and without paying for a bunch of paperwork. More or less, US jurisdictions regulating this matter should just look at what Germany’s got on the books and copy it.
4. Feed-in tariffs democratize the electric grid.
This is perhaps one of the most exciting lessons from Germany. As John Farrell noted in the title of one of the articles listed at the top of this page, “Germany has more solar power because everyone wins.” While US solar subsidies (tax credits) favor the rich and Wall Street, German solar subsidies favor the common man. Well, actually, they just favor everyone equally.
Guess what the result is. Yep, a lot more common people install solar in Germany than in the US. US solar power is primarily from large-scale solar power plants, while German solar power is primarily from rooftop solar power on residents’ homes. The “power company” in Germany is increasingly the citizenry.
5. Democratizing the grid gets residents informed and motivated about energy.
Guess what happens when you democratize the electric grid. People become more interested in energy, more informed, more motivated to save energy and get involved in the politics of energy. As someone once noted (sorry that I can’t recall the source), Germany may be the only country in the world where the taxi drivers can talk to you at length about energy policy. The same goes for energy use, the cost of energy, etc.
Democracy is built on information — on people having access to information, and people actually consuming and spreading that information. Democracies that do that less are weaker. Democracies that do that more are stronger. With energy being a critical component of life, as well as the richest industry in the world, having a citizenry that is highly informed about the intricacies of energy is a very valuable commodity.
If only there were a way to get people motivated about energy…. Oh yeah — solar policies that benefit the masses will do that!
6. The grid will not fall apart at 5% solar penetration… or 10%… or 15%… or 20%.
Early in Germany’s solar power days, critics of a solar revolution, and even many supporters, were convinced that solar penetration of the grid would be unmanageable, that solar would have to be limited to a certain percentage of the electricity supply. Initially, the idea was that 5% penetration was the max. As that approached and everyone could see that there wasn’t anything to worry about, the bar was raised to 10%, and then 15%, and then 20%.
Furthermore, studies continue to up the degree to which renewables can penetrate the grid without adding storage or creating problems. A German engineering study last year found that, “There isn’t much of a need for power storage in Germany even if it increases the share of its electricity that is generated by renewable sources by around 50%,” we reported in October. A comprehensive study released in December 2012 found that solar, wind, and storage could power the electricity grid 99.9% by 2030 cheaper than any other option.
Furthermore, decentralized solar power actually provides many benefits for the grid and society!
Of course, it decreases deadly pollution and cuts water use. However, beyond that, it also guards against fuel price volatility, decreases the risk of power outages, adds grid stability, increases grid security, and cuts the price of electricity. Let’s get into that last one in a bit more detail.
7. Solar power brings down the price of wholesale electricity.
This is a topic we’ve covered extensively before. But it’s not quick to explain, so bear with me.
Electricity suppliers get their electricity on the grid through a bidding process. The suppliers that can sell their electricity to the grid for cheapest win. Because the costs of solar and wind power plants are essentially just in the process of building them (the fuel costs are $0 and the maintenance costs are negligible), they can outbid pretty much every other source of power. As a result, 1) they win the bids when they produce electricity; 2) they drive down the price of wholesale electricity.
Because solar power is often produced when electricity demand is the greatest (and electricity is, thus, the least available and most expensive), it brings down the price of electricity even more than wind.
For more reading along these lines, see:
- German Baseload Power Cheaper than French 12 Months Running
- German Solar Bringing Down Price of Afternoon Electricity, Big Time! (More Charts & Facts)
- Graph: German Wholesale Electricity Prices Down, Retail Prices Up
- Solar PV Reducing Price of Electricity in Germany
- Renewables Driving Electricity Prices below $0 Some Afternoons (& Cutting into Baseload Power Plants’ Market Share)
- Negative European Power Prices Seen Sunday Through Thursday Due To Strong Wind Power Supply
- Renewable Energy Big Pic: Part 2 (Including 19 Charts & Graphs)
- Awesome Graphs — Today’s Solar & Wind Power Relevance in Germany
- Lots of Solar Power May Reduce, Not Increase, Electricity Prices
8. Even very grey places can generate a lot of solar power.
Despite what Fox solar experts might say, Germany has more grey days than you’d care to see. In fact, it has less in the way of solar resources than Alaska! And far less than most of the United States. But don’t take my word for it. Simply take a look at these solar resources maps from the National Renewable Energy Laboratory:
9. Even once solar power capacity is equal to 50% of electricity demand, utility execs, fossil fuel execs, their buddies in government, and their buddies in the media won’t stop fighting it.
Fossil fuel companies lose revenue and profit when solar power increases. Utility companies are in a similar boat. These are some of the richest industries in the world. They aren’t going to relinquish their profit streams easily. They’re also among those spending the most money to buy friends in high government positions. And they certainly wouldn’t be spending hundreds of millions of dollars on that if it didn’t pay off. Us poor folk in the media are even easier to smooch, buy off, or simply confuse with easy-to-accept facts from those with the “facts.”
Germany may be in a better boat (democratically) than the US, but it still has rich people working to influence politicians and the media. It still has politicians working to change the laws to limit solar power’s growth. It still has reporters in major media getting the story horribly wrong, confusing millions of people along the way.
In other words, Big Coal, Fox, Senator Boehner and gang, and even reporters in outlets like the NYTimes and Washington Post won’t change their overall opinion about solar even as it grows and grows and grows, even as it becomes cheaper for homeowners in more and more places.
10. People love the sun — they love clean, solar energy — and they always will.
In poll after poll after poll, we can see that solar energy is the most popular type of energy amongst US citizens. Often, 90% or more of respondents are supportive of solar and policies to support solar. Naturally, at such a high percentage, this crosses political boundaries.
No matter how much fossil fuel fat cats, or their friends in politics and media, try to confuse the populace, most people will favor solar energy. Perhaps it’s linked to people’s natural love for the sun. Perhaps it’s linked to their understanding that solar power is better for our air, our water, and our climate. Perhaps it’s because they understand (maybe even just subconsciously) that solar power inclines itself toward more decentralized, democratic ownership. Perhaps it’s because they realize that energy from the sun is cheap, abundant, stable, and widespread. Perhaps it’s a combination of all those things.
And, no matter what anyone tells you, this support for solar doesn’t go away as solar power installations increase. Just take a tour through Germany and talk to people about it! Or check out this post I just published: Germans Love Their Solar Power & Wind Power — No Solar Subsidy Or Wind Subsidy ‘Backlash’!