It’s about Ownership. Why Germany Kicks Butt in Renewable Energy.
October 24, 2013
Germany is racing past 20% renewable energy on its electricity grid, but news stories stridently warn that this new wind and solar power is costing “billions.” But often left out (or buried far from the lede) is the overwhelming popularity of the country’s relentless focus on energy change (energiewende).
How can a supposedly expensive effort to clean up the energy supply be so popular?
1. It’s about the cost, not the price
Most news stories focus on the cost of electricity in Germany, which has some of the highest rates per kilowatt-hour in the world. But they don’t note that the average German electricity bill – about $100 a month – is the same as for most Americans. Germans are much more efficient users of energy than most, so they can afford higher rates without having higher bills. (Note to self: check out options for energy efficiency).
2. It’s about vision
Germany doesn’t just have an incremental approach to renewable energy, but a commitment supported by 84 percent of residents to get to 100% renewable energy “as quickly as possible.” A few U.S. states have renewable energy visions (e.g. 33% by 2020, 25% by 2025) that approach Germany’s, but they’re mired in the notion that despite enormous savings to society in terms of health and environmental benefits, renewable energy shouldn’t cost any more today than conventional, dirty energy on the utility bill. Germans have taken the long view (about energy security, price volatility, etc).
3. It’s about ownership
I lied in #1. Support for Germany’s renewable energy quest isn’t about cost of energy, but about the opportunity to own a slice of the energy system. Millions of Germans are building their retirement nest egg by individually or collectively owning a share of wind and solar power plants supplying clean energy to their communities. Nearly half of the country’s 63,000 megawatts of wind and solar power is owned locally, and these energy owners care as much about the persistence of renewable energy they own as they do about the energy bill they pay. Not only do these German energy owners reduce their own net cost of energy, every dollar diverted from a distant multinational utility company multiplies throughout their local economy.
Below, related news from the US:
Solar panels are not limited to wealthy homes — it’s the middle class that is the biggest adopter of solar power in the U.S.
A new Center for American Progress (CAP) study shows that solar technology is being overwhelmingly adopted in middle-class neighborhoods in the U.S., as more than 60 percent of solar installations are occurring in zip codes with median incomes ranging from $40,000 to $90,000 (see chart below).
The CAP report used residential solar installation data from the Arizona Public Service (APS), California Solar Initiative (CSI) and New Jersey’s Clean Energy Program (NJCEP) databases to examine solar adoption trends across income levels in the three largest U.S. solar markets – Arizona, California and New Jersey. In addition to showing that middle-class homeowners are driving rooftop solar adoption, the report also found that the areas with median incomes ranging from $40,000 to $90,000 have experienced the most growth. In fact, the neighborhoods with the most year-over-year growth from 2011 to 2012 had median incomes ranging from $40,000 to $50,000 in both Arizona and California and $30,000 to $40,000 in New Jersey.
These findings are in contrast with the current utility-industry narrative, which paints rooftop solar as a technology that is only being adopted by the wealthy. The contention then from many utility executives is that lower-income customers are subsidizing wealthy customers through solar policies, such as net metering. Earlier this year, Southern Company CEO Thomas Fanning told shareholders that if solar customers aren’t paying the utility for the use of the electric grid, then “…you in effect have a de facto subsidy of rich people putting solar panels on their roof and having lower-income families subsidize them.”
So America is winding up to kick butt in solar, as well. And the butts being lining up to be kicked, are those of any utility companies that insists on clinging to 120 year old business models in the face of new technology. Without new regulatory approaches, new science-and-technology based profit incentives for our electric industry – the revolution will still happen, but it will be a lot messier and more painful than it has to be.