On March 12, 2012, the Environmental and Energy Study Institute (EESI) and the Heinrich Böll Foundation held a Congressional briefing which discussed the energy transition occurring in Germany and how that compares, specifically with regard to the solar sector, with the United States. In the international race to a low-carbon economy, Germany has raised particular interest with its quick transition from coal and nuclear energy to a renewable-energy based economy. Over the last ten years, Germany has increased the share of electricity from renewable sources from five to over 20 percent, while creating more than 380,000 new jobs in this sector. Not-so-sunny Germany is known as a world leader in deploying solar power. In 2011 alone, more than 7,500 MW of photovoltaics (PV) were installed in Germany, as compared to 855 MW in U.S. installations during the same time period, which set a record U.S. pace. Investments in Germany as well as the United States have spurred manufacturing and job growth. Government policy has been a determining factor in both countries. The speakers addressed these topics as well as issues faced in building a future grid that is flexible, smart, and strong enough for a renewable energy economy.
- The German public overwhelmingly believes in the need to address climate change. The German Federalist Party, currently in power, seeks to use more than 80 percent renewable energy by 2050, be carbon neutral by 2040 and phase out nuclear power by 2022. The Social Democratic Party and the Green Party, opposition political parties, share the same general goals, but disagree on magnitude and timeframe of commitments. Each would move even more rapidly than the current Merkel government.
- New laws, including the 1999 Energy Tax Reform, the 2000 Renewable Energy Act, the 2001 Nuclear Phase-out Law and the 2005 European-wide carbon cap and trade laws have supported Germany’s transition to a low-carbon economy and the growth of solar power.
- Since rooftop solar can be deployed directly at the consumer level, it needs only to be cost-competitive with utility energy prices. In Germany, the price of rooftop solar has been plummeting, and is expected to become cheaper than purchasing power from a utility this year. Because solar power generation peaks in the summer, wind power generation peaks in the winter, and hydropower is constant, Germany will not need seasonal energy storage. Instead, it expects to meet demand fluctuations with energy stored temporarily in local batteries, through electrolysis of water to produce hydrogen for fuel cells, and as natural gas created through methanization (adding CO2 to the hydrogen).
- The general pattern for development of solar in areas that have deployed lots of solar (ex. Germany, France, Italy, Spain, the Czech Republic and California), has been slow implementation until government subsidies incentivize installation, then quick growth of solar capacity until worries over quickly rising costs lead to dramatic decreases in subsidy programs and slowing of PV installation.
- Countries are looking towards PV for energy security, job creation, and as a means to combat climate change. California’s renewable energy standard is driving much of the U.S. PV market.
- Due to recently lowered technology barriers, falling start-up costs and anticipation of worldwide demand for solar power, China is greatly expanding its production capability in photovoltaic cells. Low manufacturing costs are leading to excess product and lower cost, while installation of PV is limited by available government subsidies.
- The U.S. solar industry is strong and quickly growing with over 100,000 employees, more than double the number in 2009. Installations of PV arrays increased 140 percent in Q3 2011 over Q3 2010.
- The U.S. solar industry creates jobs in manufacturing components, PV array installation, and system design throughout the United States.
- The challenge for solar energy is getting to price parity – where solar costs no more than grid energy. Currently, regulatory barriers and high up-front costs are impeding solar power installation, but the price has fallen in the past year and is expected to fall further as volume increases.
- The United States has had a long history of subsidizing utilities and energy generation including nuclear, coal, oil, gas and hydroelectric.
This event has been made by possible by the support of the European Commission. The European Commission is not responsible for the content of the project.