Germany’s 10 Huge Lessons About Solar Energy

February 11, 2013


If you’re Fox News, you look at the explosion of solar energy in Germany, and conclude that, Germany, at its Canadian latitude, must  have more sunshine than the United States.  I’ll take credit for begging Media Matters to upload the video that  has gone insanely viral.(skip to 2:52 if you’re rushed)

Serious observers of the renewable energy industry the indispensable CleanTechnica blog have been taking a harder look at the world’s most dynamic and hopeful example of sustainable transformation – and distilled instructive and enlightening 10 lessons.


Feed In Tariffs Work

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:

Germany (attn Fox – at the latitude of Newfoundland) crushes the US (which has not implemented FiTs) in solar power capacity:

Prices Will Get Lower. Much Lower

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.)

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.


Feed In Tariffs Democratize the Grid

This is perhaps one of the most exciting lessons from Germany. As noted in another piece, – “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.

Democratizing the Grid Gets More Citizens Involved

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!

The Grid Will Not Fall Apart at 5% Solar Penetration, or 10%, 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%.

Solar PV capacity in Germany is now equal to 50% of peak summer electricity demand:

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.

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:

(Attn: Fox) Even Very Gray Places Can Generate Lots 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:

Even When Solar Power Capacity is Equal to 50% of Electricity Demand, Utility Execs, Fossil Fuel Execs, and their Allies in Government and 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, Tea Party nutjobs, 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.

People love the sun – They Love Clean 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!


56 Responses to “Germany’s 10 Huge Lessons About Solar Energy”

  1. Living in Germany as I do I do not see the ‘promised land’ as you seem make out in your article. It is now Winter, we do get nice sunny winter days but most of the solar panels are under 10cm of snow so not working very well. Apart from the North sean coast the thing you notice about the weather here is that the wind doesn’t blow that much.
    Perhaps a different view on Germanies drive to renewables;

  2. daveburton Says:

    It’s not just fossil fuel suppliers that lose when solar is installed. Just about everyone loses. In Germany, electricity rates are going through the roof to support this boondoggle.

    • MorinMoss Says:

      From your link:

      “In addition, the current law allows exemptions for leading power-hungry industries in an effort to maintain Germany’s international competitiveness. More than 730 companies took advantage of the exemption in 2012, according to the Federal Office of Economics and Export Control.”

      Yes, giving corporations a free pass while putting an extra burden on the taxpayer.
      Where have we seen that before?

      • pendantry Says:

        Yes, giving corporations a free pass while putting an extra burden on the taxpayer. Where have we seen that before?

        I know the answer to that one! The nuclear power industry…

    • Rates are going through the roof? What hyperbole! The article says the average household might see an increase $78.00 per year.

      That’s the cost of one tank of gasoline at the pumps. Dave, we know you are a propagandist, but do you have to be such a brazen propagandist?

      • daveburton Says:

        Roger, that’s just the latest notch on the long ratchet up. Germans are now paying about three times what I and most other Americans pay for electricity, and it’s still going up. This latest increase will bring the Germans’ surcharge for boondoggle energy to about 2/3 the average total price that Americans pay for electricity.

        Really, Roger, we know you’re a google-eyed worshiper of “renewable” energy, but do you have to prove that “love is blind” every time you write about it?

        • daveburton Says:

          oops, sorry for the botched tag

        • MorinMoss Says:

          Don’t be so quick to blame all the rise in prices on the renewable surcharge.
          The invisible, grasping, withered claw of the old guard play a part.

          • daveburton Says:

            Setting aside the obvious (that 6.1% is a small part of the 3x difference in price for electricity between Germany and the USA), and also setting aside the blatant cherry-picking in that graph, you need to understand that exchange prices are not the same as cost. Power companies do not just buy electricity from one another, they also generate it.

            if you REALLY believe that fossil fuels and nuclear are higher-cost than PV and wind, then why do you oppose ending the subsidies for the later?

            That fact is that PV and wind are enormously more expensive ways of making electricity than coal, natural gas & nuclear. If they weren’t, there’d be no need for the lavish subsidies and gov’t mandates that support the renewable energy industry.

          • MorinMoss Says:

            Every industry has had government support at some point in their history.
            Some hold on to those subsidies LONG AFTER they become profitable.

            Don’t even mention coal unless you’re willing to factor in the HUGE externalities and loss of life that has been part and parcel of mining it and using it for power generation and iron production.

            The German gov’t hasn’t hesitated to slash the FiT payout – I think it must be over a dozen cuts in the couple years.
            Which other power-related industry has had their subsidies cut that much and so often in such a short period.

            I doubt nuclear is one of them.

    • greenman3610 Says:

      The number of auto manufacturers declined from
      253 in 1908 to only 44 in 1929.
      How many of those 44 can you name?
      Obviously the sign of a moribund industry destined for failure.

      • daveburton Says:

        Do you think the government should have taxed citizens to subsidize the automobile manufacturers, and imposed mandates requiring the use of the most expensive car technologies?

        • MorinMoss Says:

          Aren’t some safety features & pollution controls mandatory?
          Don’t automobiles have to pass crash tests?
          Can all that be done for free?

        • MorinMoss Says:

          If you’re in the market for a new minivan, here’s a lovely little number that I’m sure is quite affordable and, at a glance, seems to be free of expensive government-imposed mandates.

        • MorinMoss Says:

          If you’re in the market for a new minivan, here’s a lovely little number that I’m sure is quite affordable and, at a glance, seems to be free of expensive government-imposed mandates.

  3. rayduray Says:

    The Economist Magazine this week features an article on dissension arising from Germany’s dynamically transforming electricity markets.

    Select quote:

    Troubled turn
    Germany’s national energy project is becoming a cause for disunion
    Feb 9th 2013 | LEIPZIG |From the print edition

    LIKE many German regions, northern Saxony around Leipzig is humming with the word Energiewende. Literally “energy turn”, it could also mean “energy revolution”. And that is how Germany sees the twin goals it has set itself: to shut down nuclear power generation by 2022 and to get 80% of its power from renewable sources by 2050.

    Leipzig’s future is intertwined with that national project. It has an energy “cluster” of about 1,000 firms. Its utility already provides consumers mostly “green” electricity derived from sun, wind or biomass. Boffins at a research centre, amid the aroma of fermenting maize, are working out how to get ever more gas out of such stuff. The local BMW plant will this year produce its first “zero-emission vehicle”. Some 120 hectares of new solar panels were laid last year.

    Yet the Energiewende has become a political powder keg in an election year. Ordinary Germans increasingly associate it only with their own electricity bills, which went up again in January. About half of an average consumer’s bill now goes to taxes and subsidies for renewables rather than the actual price of electricity quoted at the European Energy Exchange in Leipzig’s tallest building. Germans pay more for electricity than most other Europeans.

    One reason subsidies hurt consumers so much is that industrial companies in global competition are exempted from them. This has led to a “redistribution battle”, as some politicians curry favour with voters worried mainly about their bills, and others seek to appeal to those worried about German industry and jobs. Superimposed is a general anxiety that Germany might squander its global competitiveness over its cost of energy. The counter-argument, that the Energiewende will in the long run lead to lower costs and higher competitiveness, seems abstract. [Continues at website]

  4. pendantry Says:

    … the video that has gone insanely viral…

    Granted, a stupid comment like that from an geography-challenged ‘analyst’ deserves publicity, but I don’t call 170k hits ‘insanely viral’, myself.

  5. […] Germany’s 10 Huge Lessons About Solar Energy ( […]

  6. rayduray Says:

    Hi otter17,

    Re: “I’ll be their to do engineering work and testing for the ProSolar 1MW inverter at my company’s Berlin offices”

    1MW? That’s a hefty sized inverter. I assume the output is grid power and the input is ??? A neighborhood solar array? Or other?

    I thought to seek out comparables. Here’s a 3,100 Mw inverter system on the U.S. West Coast.

    Not exactly a comparable, I guess. 🙂

    Please do send us field reports from your visit to Germany. I think I can vouch for Peter that the both of us are very intrigued by developments over there. 🙂

    • rayduray Says:

      Re: “Though with Germany’s idea of democratizing the grid”

      What a delightful thought. Democratizing anything in America would be a very refreshing change. 🙂

      I look forward to your “taxi tales” reporting.

    • I would hazard a guess that German taxi drivers will tell you about the high price of energy here in Germany and complain that the green taxes are pushing up the prices all the time:

      • Which part of Germany are you visiting? Where I live in NW Germany it has been sub-zero for many weeks now, with a heavy overcast. Most of the solar arrays I have seen are under snow, i.e. not operational. This is why I would contend that solar is not fit for purpose at these latitudes. It may work well in sunnier lower latitudes but here it is an expensive distraction from sorting out a workable energy production system.

        As for GWFP perhaps they do not see the same problem set as yourself

        Enjoy your trip, bring your thermals.

        • rayduray Says:

          Aw, geez Edwin, why spoil the solar party with quibbles about reality? 🙂

          Of course I jest. I like the way that you are injecting reality into what all too often becomes a pie-in-the-sky theoretical discussion of what potential production various alternative technologies are capable of.

          Solar PV panels buried under snow? It’s quite a compelling image. Thanks, again for that dose of reality.

          And in the Mojave Desert and in NW China the problem isn’t snow. It’s the damn dust that degrades the solar PV performance and requires constant maintenance, lowering profits, increasing costs and creating headaches for any who care to think about such things.

      • I sure we can survive anything that mother nature throws at us, I just wonder about this solar stuff having a major role in it. We need to sort out a technology that gives dependable 24/7 source of electricty.

  7. MorinMoss Says:

    Until we hear back from you, here’s a 10 min video about renewable energy in Germany from Robert Llewellyn’s Fully Charged channel.

  8. Perhaps a read of this will give you a pause for thought on what ‘Germany’s 10 Huge Lessons About Solar Energy, might be:

    • greenman3610 Says:

      the nice thing about being technological laggards is, if the German experiment goes south, we can learn from their mistakes. I’m guessing that, they are pretty smart people, unlikely they will go down the tubes – in fact, German energy exports have been holding steady or rising in recent years.
      more likely they will just have a huge jump on us in this key area, not that climate deniers will give a damn.

  9. MorinMoss Says:

    See link below for a Fraunhofer Institute report on electricity production for Germany in 2012.

    A real pity how much coal they use and gas-fired is down due to high prices??

    Click to access electricity-production-from-solar-and-wind-in-germany-in-2012.pdf

    • daveburton Says:

      Thank you for that link, MorinMoss.
      Two thoughts:

      First: natural gas prices will come down if & when they start using American fracking technology.

      Second: here’s some arithmetic from the numbers in that report, which should give PV & wind fans pause:

      Wind (2012):
      45867 GWh/yr / (29.9 GW * 24 * 366) = 0.1746
      (capacity factor = 17.46%, i.e. actual production = 17.46% of rated nameplate capacity)

      PV (2012):
      27944 TWh/yr / (32.44 GW * 24 * 366) = 0.0981
      (capacity factor = 9.81% of rated nameplate capacity)

      For comparison, nuclear’s capacity factor exceeds 90%.

      • MorinMoss Says:

        Those numbers are quite disappointing but you have to careful to compare apples to apples, especially with German solar PV which has seen explosive growth in installations.

        7.5GW was installed throughout 2012 so you’d have to find monthly stats of connected, metered nameplate capacity vs electricity production and do the tally to get an accurate calculation.

        Approx 2.5 GW was installed from August to December missing several productive months and lacking a full year’s operation.

        • daveburton Says:

          Good point, MorinMoss.

          From this story (out a few hours ago), I infer that 34.44 GW was the end-of-year nameplate capacity for 2012.

          If 5 GW was installed in the first half of 2012, and 2.5 GW in the 2nd half, let’s approximate the installation progress by saying that 5 GW was online for an average of 9 months, and 2.5 GW was online for an average of 3 months. Then the average nameplate capacity for the year was approximately (33.44 – (.75 x 2.5) – (.25 x 5)) = 30.315 GW.

          Recalculating the capacity factor using that number for the nameplate capacity, rather than the 34.44 GW end-of-year number, yields:
          27944 TWh/yr / (30.315 GW * 24 * 366) = 0.10494
          (capacity factor = 10.49% of rated nameplate capacity)

          • MorinMoss Says:

            Let’s not forget that solar has a certain predictability – no one expects PV to produce during certain hours of the day.
            The good thing about it is that it typically produces during one of the days peak when a power purchase would be most costly.

            In fact, one of the reasons for the price increase for consumers is that utilities are raising the price for off-peak power to offset the lower revenues in the spot-price market due to increased solar output.

            The link below gives 30-yr averages of sunlight for several dozen German cities and towns across the country


            As far as I’m aware, the majority of installations are in the south and center.
            The average number of sunny hours is about 1600+ per year.
            No location get more than approx 1750

            Now have a look at good ol’ USA:

            Do you see what I see?
            What’s the LOWest number you can find for an American city?

          • daveburton Says:

            It’s hard to believe that no city in Germany is less gloomy than Seattle. I doubt that it’s true. I suspect that the German “sunny hours” at that link aren’t counted the way you’re assuming. For PV purposes, with fixed-mounted panels, when the sun is very low in the sky it might as well be cloudy as clear (in fact, a light cloud cover might be better than a clear sky).

            Also, this sentence makes no sense: “one of the reasons for the price increase for consumers is that utilities are raising the price for off-peak power to offset the lower revenues in the spot-price market due to increased solar output.” Do you really think that electricity prices are going up because the cost of buying electricity is going down?

          • rayduray Says:

            Hi Dave,

            Re: “Also, this sentence makes no sense: “one of the reasons for the price increase for consumers is that utilities are raising the price for off-peak power to offset the lower revenues in the spot-price market due to increased solar output.” Do you really think that electricity prices are going up because the cost of buying electricity is going down?”

            I’ve had this explained to me and it makes sense. What happens is that a German utility like RWE is mandated to buy solar generated power at a high price due to the feed-in-tariff law. So when the market is saturated mid-day the utility will often sell the energy at a cost way below what it is forced to pay for it from the small but plentiful solar power generators who are paid a very high price for their variable input.

            This loss of profitability has to be made up somehow. Thus the night time price for base load energy when there’s no solar input has to be raised to maintain overall profit stability for the utility.

          • MorinMoss Says:

            Check the article about solar in Seattle below. The cheap power there makes it a bit of a tough decision but that’ll become less so with the rapid price drop.

            And, the 85+% hydro supplied by Seattle City Light makes for easy “storage” as you throttle back the turbines when solar power is high.

            In fact, looking at the electricity fuel sources (2nd link below), it should be quick and painless to phase out their coal usage and ramp up the solar, natgas or biomass instead.



          • daveburton Says:

            Belated corrections:

            I seemed to have had trouble typing “32.44” that day; I botched it three times:
            s/34.44/32.44/ (twice!)

            The correction changes the average German nameplate capacity for the year 2012 to 29.315 GW, which changes to capacity factor calculation to:

            27955 GBh/yr / (29.315 GW x 24 x 366) = 0.108562
            (capacity factor = 10.86% of rated nameplate capacity)

          • daveburton Says:

            Oh, fer cryin’ out loud!

            I typo’d my typo corrections. Grrrrr…

            27944 GWh/yr / (29.315 GW x 24 x 366)= 0.10852

            Capacity factor = 10.85%

            Sorry about that!

          • MorinMoss Says:

            It’s commendable that you’re trying so hard to fix errors, assuming your revised figures are correct.
            However, I don’t think that harping on capacity factor is as meaningful as you’d like to think.
            When an energy source is a very small percentage of the mix, it doesn’t matter very much and when it becomes a significant factor, you have to take a comprehensive look at all the pluses and minuses.

            And it’s a bit disingenuous to look at solar PV strictly in terms of capacity factor when no-one expects it to produce power during the night.

            There’s no perfect source – even if nuke plants had 100% availability, they still need the grid to transport that electricity to the consumer. If something interrupts a consumer’s connection to the grid, all you can do is sit in the dark, waiting for someone else to fix it – unless you have your own way of generating electricity.

      • daveburton Says:

        typo correction:

        “27944 TWh/yr” should be “27944 GWh/yr” (or “27.944 TWh/yr”), of course.

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