Amid Protests, Fate of German Solar Industry Remains Unclear

Likely a result of mass protesting, the German government recently announced that their scheduled cuts in solar subsidies would be delayed and perhaps revised. Cuts for residential solar photovoltaic (PV) systems have been delayed until May. At that time, incentives will undergo gradual reductions each month. Cuts for solar utilities have been delayed until June.

When Chancellor Angela Merkel’s government began to push for cuts, anti-solar energy factions widely publicized the news as proof that the renewable energy isn’t a feasible solution to the world’s energy crisis. Yet the opposite may be true. In 2000, renewables accounted for 6.3 percent of Germany’s energy sources. Renewable energy now accounts for over 20 percent of Germany’s electricity.

When the weather is favorable, there are days when renewable sources generate more energy than the country uses, according to a report in the New York Times. Germany’s generating capacity from all forms of energy now stands at 133 gigawatts, but Germany needs only 90.5 gigawatts to meet demands, according to the director of the German Federal Environment Agency, Harry Lehmann.

Germany’s electrical grid is not connected across the nation, however. The electric utility Amprion is working on installing 500 miles of transmission lines across the nation.

German subsidies have not only been successful in creating a broader demand for solar but have prompted new technologies, helping to bring down installation costs. Costs for German solar modules have dropped to almost $1 per watt. The amount of solar installations last year was double the government’s target. Germany added 7.5 gigawatts last year alone and expects to add 8 more gigawatts this year.

Merkel’s government argues that subsidies are becoming less necessary. The opposition argues that cuts will result in the loss of tens of thousands of green jobs, an argument that carries some weight as Europe struggles with high unemployment rates. According to a Reuters report this week, the euro zone’s unemployment rate has risen to 10.7 percent, the highest it’s been since 2000.

Far from being a failure, German’s solar incentive programs may be a victim of their own success.

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