Germany which has the largest number of solar power plants in the world has done more to fight Climate Change than any other nation. The country with its progressive and pragmatic renewable energy subsidies has single handedly made solar power reach power grid parity in many parts of the world . The country which lowers solar subsidy by 10-20% each year has made solar panel costs go down by 50% in the last 3 years. While lowering the subsidy the country has installed more than 7 GW of solar capacity in the last 2 years. The country installed 4 GW of solar panels in December 2011 alone which is almost equal to China’s capacity.While its true that German solar panel firms have been hit due to massive low cost competition from China, the country has the biggest solar inverter manufacturers (SMA) and some of the biggest suppliers of solar equipment ..

Critics have claimed that Germany has spent $130 billion in solar subsidies to provide only 0.3% of its electricity. This is a shallow and ignorant argument at its worst. The critics from all over the world cite figures and statistics without going into the deeper implications. Germany has in the last 5 years made solar energy reach the poorest people in the world . The country’s subsideis have made large solar companies lower costs and improve technology at a rapid pace to keep up with the lowered subsidies. Solar Panels which were sold for $4/watt in 2008 are solar for 80c/watt now. A truly remarkable story in Energy which has been missed the the fossil fuel funded hacks in media. For  the last few centuries man has been trying to harness  solar energy at reasonable costs but has failed to make a big impression. Germany in the last 5 years has made a huge and lasting impact as solar energy will go from strenght to strenght ..

Here are some of the shallow negatives which are being propogated in the media

1. Even with unrealistically generous assumptions, the unimpressive net effect is that solar power reduces Germany’s CO2 emissions by roughly eight million metric tons ? or about 1 percent ? for the next 20 years. When the effects are calculated in a standard climate model, the result is a reduction in average temperature of 0.00005 C
2. Using solar, Germany is paying about $1,000 per ton of CO2 reduced. The current CO2 price in Europe is $8. Germany could have cut 131 times as much CO2 for the same price.
3. Defenders of Germany’s solar subsidies also claim that they have helped to create “green jobs.” But each job created by green-energy policies costs an average of $175,000 ? considerably more than job creation elsewhere in the economy

Germany’s EEG program instrumental in bringing Solar Energy  Close to Grid Parity

Germany has been the poster child for Feed in Tariff success in promoting renewable energy.Germany Renewable Energy Law which was passed in 2004 led to a massive growth in solar and wind energy making the country a global leader in Green Technology.German Renewable Energy equipment producers are leaders globally and generate substantial employment in the country.The success of the FIT model in Germany has been replicated in countries across Europe to meet EU’s target of 20% renewable energy generation by 2020.Germany’s FIT success has led to subsidy problems leading the government to cut FIT tariffs by an additional 11-16% in 2010 on top of the annual FIT reductions.Despite these cuts,Germany will install a whopping 6-10 GW of solar installations in 2010 which is almost equal to 30% of   the 20-25 GW global installation capacity till date.Despite much criticism about expensive subsidies,Germany’s FIT program has been instrumental in bringing solar energy closer to grid parity in such a short span of time.It is doubtful whether solar grid parity could ever be achieved without Germany’s EEG program  Malaysia has become the latest country to try and emulate Germany.The country which is lagging behind in GHG emission reductions plans to introduce a Feed in Tariff program for promoting renewable energy in 2011.

Earlier Take on Bad Journalism

I continue to be surprised by bad and shallow analysis of renewable energy subsidies done by media. Most of it is due to bad research and lack of investigative and unbiased journalism. Writers with little or no background in energy or cleantech sensationalize an issue taking a report from some biased thinktank. Here is one example from a website called ironically Reason.com which you can read here http://reason.com/blog/2012/01/31/black-hole-sun-germany-spends-100-billio

What the writer is saying that Germany is spending massive amounts of subsidies to get little amount of power. What he has missed

1) He is not comparing the subsidies for solar with that of fossil fuels. Does he know thatFossil Fuel Subsidies globally amount to $550 billion a year which is many times more than that given to Solar, Wind and others.Even a developed country like Norway gives 5 times more subsidies to fossil fuels than renewable energy

Norway has been hailed as the toughest cutter of Greenhouse Gas Emissions amongst the developed countries promising to cut Carbon Emissions by  30-40% by 2020 from the 1990 Levels.Compared to this USA has promised a measly  17% cut from 2005 levels and the EU  only 20% by 2020 from 1990 levels.Norway’s cost of cutting emissions is also quite huge $200 a tons of Carbon Dioxide.Norway has also promised to cut Carbon Emissions internally rather than buying cheap carbon credits from abroad using its massive sovereign fund.Note the Cap and Trade Kyoto Protocol has been criticized for being ineffectual in curbing Global Warming.However a NGO reveal today that Norway’s spending on Fossil Fuel Subsidies is $1.4 Billion annually which is 5 times more than on its Subsidy for Greener Forms of Energy.Note $550 Billion is spent worldwide on subsidizing Fossil Fuel Energy which is multiples of that spend on Renewable Energy.Norway is a major Oil Producer and its Huge Sovereign Fund of  $450 Billion has been built mainly through Oil Revenues.Therefore the massive subsidies on Oil is not surprising though incompatible with its commitment towards Climate Change.

2) He says that 18 billion euros is the cost of solar energy over 20 years . He conveniently forgets/ does not know the basic concept of time value of money.

3) He does not consider the costs on health,pollution,mining deaths and other social costs of fossil fuel electricity. He forgets to mention the BP Oil Spill and Fukushima Disaster.

4) He says it is cheaper to do energy efficiency than solar energy , a fact that is well know but will energy efficiency alone solve our global warming problems. Nobody doubts the fact that energy efficiency is cheaper but you need renewable energy as well