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Page added on September 25, 2012

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Why Germany Owns 1/3 of the World`s Photovoltaics

Alternative Energy

According to Global Market Outlook for Photovoltaics until 2016 (EPIA, 2011), about 36 percent of the total worldwide photovoltaic capacity is installed in Germany. Apart from Italy at 18 percent, the rest of the world is far behind. The United States is sitting at a mediocre 5th place with 6 percent of the total capacity. Why is it that Germany has been successful when it comes to installing photovoltaics and other countries are struggling?

Global Installed Solar Capacity Chart

Erneurbate-Energien-Gesetz (EEG or The German Renewable Energy Act) is the name of a set of rules that were passed in law by the Federal Government in Germany (Die Bundesregierung) in 2000. The motivation behind the Act was to promote the growth of Germany`s renewable energy sector with financial incentive.

The German feed-in tariff scheme (FIT-scheme), an important part of EEG, enables homeowners, communities and small or large businesses to collect a fixed rate for every kWh of clean electricity they produce. Rates vary between the different technologies (i.e. solar panels, wind turbines), system size and location.

How is the German FIT-scheme different from net metering in the U.S.? A typical FIT-scheme follows a 20-year schedule with a pre-defined price – similar to power purchase agreements (PPAs), but in most cases with higher rates. This way of incentivizing renewable energy is more direct and results in a guaranteed return of investment.

The money that pays these rates is funded through a surcharge on electricity bills – typically about 15 percent of the expenses of electricity in a German household. On the other hand, since it`s introduction, EEG has resulted in 520 – 840 million euros in savings for consumers due to a 40 percent drop in peak electricity. The costs of PV systems have dropped by more than 50 percent in the last 5 years. Germany aims to generate one-fourth of their electricity with photovoltaics within 2050.

6 Comments on "Why Germany Owns 1/3 of the World`s Photovoltaics"

  1. DC on Tue, 25th Sep 2012 7:07 pm 

    The US is having trouble because it has no actual govt to propose, guide or implement the needed changes. The structures in washington are not really a national capital, but a place to plan and co-ordinate the US permanent wars. Its not a government in the sense most people understand the concept. The US corporate rulers dont like clean or decentralized anything, therefore, you dont get anything like that. The German govt, unlike the US one, has actual authority, and also large parts of the population on board with this plan. The US has neither. So what projects are undertaken, are mostly tokenism.

    The civilized nations of the world that are working on a better way, will be in a better spot when the crunch comes. North America, will likely disintegrate when its creaky systems fall apart, and everyone realizes our half-baked efforts to put alternatives in place were fraction of a fraction of what were needed.

  2. Arthur on Tue, 25th Sep 2012 10:19 pm 

    Germany is not wasting it’s resources on 800 foreign military bases, 14 carriers, thousands of nuclear warheads, or spending more on ‘defense’ then the rest of the world combined. If Germany can avoid in getting embroiled in wars, then expect Germany to be able to generate it’ s electricity largely from solar and wind by 2020.

  3. SOS on Wed, 26th Sep 2012 2:25 am 

    Germeny owns most of the worlds solar capacity because Germany has wasted more money than any other government on this expensive energy source. The alternatives are much more attractive.

    Solar has been around as long or longer than other sources and was never mainstream. Why? It is inherently less efficient, more costly to use. It it were more efficient and less costly to use it would be the dominate energy source, not the alternative.

  4. deedl on Wed, 26th Sep 2012 6:46 am 

    Germany made the gift of solar to the world. The initial costs of PV in Germany (and everywhere) were very high, but constant investment caused prices to drop due to scaling. This year solar reached grid paritiy in Germany, meaning that it is as cheap to use self produced PV-power as it is to buy electricity from the grid. So solar was expensive in the past but it is not anymore. Its cheap now.

    Every year for the last decade solar became cheaper due to scaling. After the intial investment made by Germany, more and more nations, like Spain and Italy, hopped onboard, profitting from the sunken prises and helping to lower them further by increasing the scale of the market.

    Germany is a rich industrial nation which consumes a lot of energy. We Germans therefore carry responsibilty for our actions and their influence on climate, and we carry responsibility to help poor and less developed nations to improve their situation. With the solar investment we did both, we played our part to help improving the climate and we made technology affordable to produce offgrid electricity with local resources (e.g. the sun). In many remote areas of the third world, PV alread is the cheapest source of electricity, slowly replacing the diesel generator.

    So i pay more for my electricity than most of you do, but i am happy with that because i know it is an investement that will serve the electricity needs of my grandchildren and their grandchildren. And i help to create well payed green collar jobs that will pay taxes needed to feed me when im retired 😉

    So if americans think it is good for their economy to pay 5 ct per kWh and spend the remaining money on oil sold by regimes that support terror or to buy throw away plastic crap from china to support jobs overseas, its their choice. But then they have to carry the consequences for those actions. Manufacturing does not come home buy having cheap electricity, it comes home buy buying local goods, that includes energy.

  5. Herrmann on Wed, 26th Sep 2012 8:43 am 

    I am in Germany and I don’t have much money. I am not very happy about the fact that I have to pay a surcharge on electricty for PV because I am struggling already to feed my family, and cannot buy my kids ice-cream or something like that. And I cannot install PV since I cannot afford my own house, and we have to rent.

    My neighbour has a good income, and they have their own house and a large shed. On both roofs he has installed PV, which earns him some nice extra money even after the loan cost to buy the PV. He uses that extra money to buy nice ice-cream for his kids and take them to a holiday.

    I often see my neighbour and his kids having some ice-cream. He is a nice guy and always says thank you for the ice cream, because he knows the ice cream money is what I pay as PV surcharge which goes to his account as earnings. My kids are very polite and don’t complain that they can’t have an ice cream. They know our money goes to the neighbours’ kids.

    And when the neighbour and their kids leave for a holidy they also say thank you, and we care for there pets while they are away.

    Here in our small town there are many like us who have no money and pay extra for PV, and the other who have money and houses and make extra money from PV.

    You could say half of the population who are the poor guys pay extra for electricity, and the other half who are richer and can afford PV they get that extra money.

    I wonder if there is any smarter ways to move money from the poor to the rich.

    BTW none of us poor got offered some support from the rich to have our own PV. Imagine if everybody had PV.

    The rich need the poor.

  6. Kenz300 on Wed, 26th Sep 2012 1:58 pm 

    The price of oil, coal, and nuclear keep rising and causing environmental damage to the climate.

    The price of wind and solar are dropping every year with advances in technology and economies of scale.

    Easy Choice.

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