What Can Germany Teach Us About Solar Energy?

Image: aircon.com

ERIC WOLFERT, ENERGY & ENVIRONMENT DIRECTOR

Germany is hardly anyone’s idea of a sunny paradise--its capital city of Berlin sits at a higher latitude than Detroit and Pittsburgh. Yet Europe’s greatest economic power has become a world leader in the development of solar energy, with solar providing nearly 75% of the nation’s energy over periods of several hours and 17% of its total consumption during the first six months of 2014. (By comparison, solar made up a paltry 0.23% of American energy consumption in 2013.) In doing so, Germany has demonstrated that transitioning away from fossil fuels, far from being a painful and expensive process, can actually have a number of positive effects. Its energy grid, far from being unreliable and blackout-prone as many postulated, has been ranked the most reliable in the world since at least 2008, and there is ample evidence that the increased production of renewable technologies is leading to reduced energy prices in Germany and neighboring countries.

Given the European Union’s seemingly endless economic stagnation and the poor performance of austere economic policies since the global recession hit in 2008, cheaper energy prices provide a glimmer of hope for recovery. Furthermore, a September 2011 study from the German Institute for Economic Research found the deployment of renewable energy to positively impact GDP growth in Germany, citing a net increase in private investment, as well as a decline in energy imports, improving Germany’s trade balance. If there is one sincere drawback to the program, it is that increased use of renewable energy technologies has not decreased the use of coal as quickly as many advocates had hoped--though coal use is unquestionably on the decline.

    One simple, prominent reason for Germany’s success with renewables comes from more sustained public support for the industries, especially when compared to the United States. German renewable energy producers have taken advantage of a program known as feed-in tariffs, in which the government pays the renewable energy companies a fixed amount per kilowatt of energy produced, thereby incentivizing the companies to expand and produce more.

Similar programs do exist in the United States, but are decidedly more fickle--programs such as the Production Tax Credit are structured in a similar way to Germany’s feed-in tariffs. Unfortunately, they have become a case of political football, with conservative lawmakers often seeking to see the program halted, though some conservatives have rightfully lauded the tax credit for supporting jobs.

The program in Germany may also provide  a geopolitical advantage. As Russia continues its rise as a global aggressor under President Putin, many of the nations in the region are dependent upon Russian natural gas imports as a crucial part of their energy supply. The less Germany is required to depend on Russia for energy, the better for German security; it is no wonder that Ukraine has begun to take steps to this effect.

    Herein lies a lesson for policymakers in the United States: Consistent investment is key if we are to achieve the economic, environmental, and public health imperative of increasing renewable energy use. German renewable energy providers are virtually guaranteed that the feed-in tariff will provide a consistent source of revenue, even though the amount paid out by the German government has decreased recently as production and cost of the energies has bettered the projections. In the United States, the partisan wrangling over relatively modest programs like the Production Tax Credit has caused inconsistent deployment of renewable energy and often sacrifices jobs at the altar of ideology. Five times Congress has allowed the program to expire, and a corresponding loss in energy output and jobs has followed each time.

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Image: AWEA

    According to the Energy Research Center of the Netherlands, German solar energy “over its lifetime uses 86 to 89 percent less water, occupies or transforms over 80 percent less land, presents approximately 95 percent lower toxicity to humans, contributes 92 to 97 percent less to acid rain, and 97 to 98 percent less to marine eutrophication” when compared to coal. Perhaps it is unsurprising then that even in the United States, which leads the world in CO2 emissions per capita and has yet to significantly develop renewable energy, a decrease in the use of traditional energy saves more money on health impacts than it loses on slightly increased energy costs.

    Solar energy has, on net, positively impacted Germany’s economy, environment, public health, and national security, and much can be attributed to the feed-in tariffs described above- a relatively simple, straightforward policy. The United States is perfectly capable of following their path, but consistent investment in renewable technologies, as has been seen in Germany for several years now, will be key. Political posturing over a policy that is vital to the economy, public health, the environment, and national security is simply unnecessary and counterproductive.