Billions for Nothing: the Crisis of Germany’s Green Energy Policy

By Fritz Vorholz

Foreigners like to make fun about Germans: Little good weather – but lots of solar panels. Although Germany is not situated in the sunny part of the world, no country has more solar panels. The boom, however, is artificial. And it costs consumers an absolute fortune.

The sum can be spelled out quite precisely: the expected installation of new solar panels in 2009 alone will cost German consumers ten billion euros in the next 20 years. This will produce about 1.8 billion kilowatt hours of solar electricity each year, which corresponds to about 0.3 percent of Germany’s current electricity consumption. That’s near to nothing.

But the ten billion euros are just the cost for the new systems. The panels built up to 2008 will burden consumers with an additional cost of 30 billion euros, according to calculations by the Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI).

And the cost avalanche is growing. If the forecast of the European Photovoltaic Industry Association were to materialize, there will be so many solar panels installed in Germany by 2013 that the cost will grow to more than 77 billion euros – adjusted for inflation.

77 billion euros! But it is not the solar technology itself which generates this massive burden. It’s a legal funding clause, included in Germany’s Renewable Energies Act (EEG). According to this law, the producers of solar energy are paid a fixed amount of money for each kilowatt-hour they feed into the system – and all German electricity consumers are billed for this cost. The price of the feed depends on the size of the solar system and the year of its installation. For example, 43.01 cents is the price for solar electricity produced by a small roof panel that was installed this year. The owner of the solar panels will receive this price for each kilowatt-hour – for the next 20 years, in this case until the 2029.

According to German law, this right to feed electricity from solar energy holds true for panels installed next year or the year after, guaranteeing fixed prices for 20 years.

Per kilowatt-hour, these guarantees are somewhat lower than those of older plants. Nevertheless, the costs for consumers are rising year after year: That’s because they still have to pay the more expensive solar electricity generated by older plants and, on top of that, pay for the somewhat less expensive, but more abundantly flowing electricity from the new systems….

See also Green Jobs Go Up in Smoke: Germany Solar Cell producer to Slash  500 Jobs here

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