Germany to pull plug on solar subsidies by 2018

Jul 08, 2013
A worker checks solar panels on the roof of Conergy's solar panel plant in Frankfurt an der Oder. Germany will stop subsidising solar energy by 2018 at the latest, its environment minister said Monday after last year initiating a scaling-back of generous state support for the faltering industry.

Germany will stop subsidising solar energy by 2018 at the latest, its environment minister said Monday after last year initiating a scaling-back of generous state support for the faltering industry.

Peter Altmaier of Chancellor Angela Merkel's Christian Democratic Union had fought to set a ceiling of solar power capacity above which the government would no longer offer its financial backing.

He said Monday that the limit of 52 would be reached by 2017 or 2018. Currently installed in Germany generate 34 gigawatts of power.

"The development of solar energy ran out of control in the last three years," Altmaier told a news conference.

The system of subsidies, under which solar energy producers are paid a guaranteed price for each kilowatt-hour of power generated, created a boom in recent years, making Germany a global leader in the field.

The farm sector in particular seized upon solar power as a chance to supplement income, and the low price of solar panels from Asia contributed to the craze.

The state support was justified in large part by Germany's much-heralded "" in which it is phasing out nuclear power and aiming to produce 80 percent of its power with by 2050.

But solar energy is notoriously unreliable as a power source and Germany has seen its market hobbled by and ferocious competition from players such as China.

Merkel, campaigning for a third term, has promised an overhaul of subsidies for renewable energy after the September general election, amid criticism particularly from the energy industry.

Berlin "has so far invested 216 billion euros ($278 billion) in and the biggest chunk went to solar, the technology which does least to ensure the power supply," said the head of industrial group Siemens, Peter Loescher, in an interview published in the business daily Handelsblatt on Monday.

Germany has seen a wave of solar company insolvencies and the number of people employed in the industry fell to 87,000 in 2012 from 110,900 a year earlier, while sales plummeted by 11.9 billion euros, according to government figures.

Solar panels are at the heart of a current trade spat between China and the European Union, which accuses the Chinese of selling its solar panels below cost.

Explore further: Ambitious EU targets for renewable energies make economic sense

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CapitalismPrevails
2.7 / 5 (17) Jul 08, 2013
"Germany will stop subsidising solar energy by 2018" and i bet the price of solar power will fall even more just as it has in the past 4 years as a result of less subsidies. Solar companies won't be permitted to take subsidies for granted because there will be less demand and so they will be forced out of their comfort zone to be more productive/produce more supply. Just let the markets work and we'll have better end results.
Bob_Wallace
3.9 / 5 (7) Jul 08, 2013
By 2018 it is unlikely solar will need any subsidy. Right now Spain is starting a new large solar installation without subsidies. They have projected costs at $1.41/watt.

At $1.41/watt solar even in not-very-sunny northern Germany would have a LCOE of around $0.10/kWh. That's lower than gas peaker power, than new coal or new nuclear.

And after five more years of decreasing panel prices and BOS costs we'll probably be below $1/watt. Panel manufacturing prices are expected to drop by 1/3rd over the next four years.
--

Germany structured their subsidies in a way that lit a fire under the market. By giving long term Feed-in Tariffs (FiTs) they created a mechanism for owners to make more profit by lowering system cost. It worked like a charm. Market juice.
VENDItardE
1.5 / 5 (26) Jul 08, 2013
OMG, about fkn time, let this shit die already
Howhot
4.6 / 5 (9) Jul 08, 2013
In the meantime Exxon's profits have soured to nearly 43 billion this year. Its funny how that works out.
Bob_Wallace
4.6 / 5 (9) Jul 08, 2013
I suspect wagon makers and livery stables were still doing great business even a few years after Henry introduced the T.
Neinsense99
2.6 / 5 (15) Jul 09, 2013
OMG, about fkn time, let this shit die already

This article is about renewable enerygy, not your posting history!
antialias_physorg
3.8 / 5 (4) Jul 09, 2013
By 2018 it is unlikely solar will need any subsidy.

Exactly. The prices for solar have dropped to a degree no one could have imagined when the subsidies started. So it's OK to phase out subsidies in an area where they are no longer needed.
Though to be fair: the amount of subsidies payed out by then for solar will still be microscopic compared to the subsidies coal and nuclear have gotten in their time - and are still getting. So any kind of hype over 'expensive subsidies for solar' is completely inappropriate.
According to this study:
http://www.heise....3/1.html

Total subsidies received (in germany) by:
black coal: 311bn EUR
brown coal: 87 bn EUR
nuclear: 213bn EUR
All renewables combined (solar,hydro, biogas, wind,.. ): 67bn EUR

If you include these then the REAL cost of nuclear is the most expensive (at roughly 42ct/kWh)
Even photovoltaics - by far 'worst' of the renweables lot - already beats that at 37ct/kWh.

antialias_physorg
4 / 5 (4) Jul 09, 2013
If you look further into the study then renewebales have gotten more than coal per kWh (7.6ct) since 2007 and more than nuclear since 2010.
This is due to a forced pace of the changeover and needed investments.

While this may seem expensive at first glance if one compares that to adjusted Euros in the first years of nuclear then thing look very different: Nuclear back then got more than 70ct/kWh in subsidies...no that is not a typo: more than seventy cent!)

Compared to that the changeover is truly a bargain on all fronts - even if you add in needed infrastructure changes and storage technologies.
gblaze41
3 / 5 (4) Jul 09, 2013
In the meantime Exxon's profits have soured to nearly 43 billion this year. Its funny how that works out.


Yes considering that has nothing to do with the article, it is funny.
deepsand
2.8 / 5 (17) Jul 09, 2013
OMG, about fkn time, let this shit die already

You lack the humour to be entertaining, the knowledge to be informative, and have all the charm and attraction of a deceased rat which suffered from leprosy and incontinence.

Tom_Andersen
1.6 / 5 (7) Jul 17, 2013
Germany will not end subsidies in 2018. They will stop signing new 20 year subsidy contracts at that point.

Its a huge difference.

One person noted that the price per watt of solar is now low. It could be zero, and it would be at least $0.50/kWh in developed countries. The price is now dominated by the installation costs like steel and concrete.

The real down spiral for these ritualist, useless programs has started, but will accelerate.
Tom_Andersen
1.6 / 5 (7) Jul 17, 2013
In the meantime Exxon's profits have soured to nearly 43 billion this year. Its funny how that works out.


Exxon is a huge winner in the wind and solar markets. They are an energy company. The highest profits per invested billion in energy right now are wind and solar.