Analytical Wealth

Interesting FT piece on solar energy production in Germany, discussing the roles of government subsidies and the companies that are positioned to profit by building and installing photocells.

(From the FT): "Germany has reinforced its status as the world leader in solar power generation, after less stringent cuts in renewable energy subsidies than had been anticipated.

Germany boasts more than 50 per cent of the world’s installed solar power capacity, thanks to the subsidies, known as feed-in tariffs that give households with solar panels a fixed income for 20 years from electricity sold to the national grid."

Graphic courtesy of the Financial Times

...The resulting industry, with around 60,000 employees, has a turnover that could rise to €13bn (£10.2bn, $20.4bn) a year by 2010, compared with around €7bn in 2007, according to industry estimates. The country is the third largest producer of solar cells, with a 20 per cent market share, compared with China with 28 per cent.

Experts predict that in the long term solar energy may provide up to 30 per cent of Germany’s power needs for electricity and hot water, compared with less than 1 per cent today. This is seen as vital, both to reduce greenhouse gas emissions, and for energy security after oil price increases and the decision to phase out nuclear power.

Spiralling energy costs globally have spurred German demand for solar equipment used to heat household water.

Many regional authorities have backed this sector – which is separate from the industry built around the feed-in subsidies – and Marburg in central Germany this month became the first city to require households to install such equipment as part of house construction or renovation. They face €1,000 fines if they refuse."

If the experts are right and Germany's solar energy programs will be able to eventually supply 30% of the nation's electricity, the question offered is: "why in the world isn't our government making the same sort of investments?" . To put that 30% figure into better perspective consider that the U.S. generates (per the EIA for calendar year 2005) about 50% of our electricity from coal, 19% from Natural Gas, 19% from Nuclear energy, and 7% from Hydroelectric Plants. Solar energy could potentially generate more electricity for the country than any other energy source besides coal, and could be used to either phase out or scale back energy production methods that are harmful to the environment, costly, etc, etc.

Imagine the reduction of our nation's carbon footprint if we were able to reduce our reliance on coal by 60%, and/or reduce our reliance on other energy sources like natural gas and nuclear energy. Imagine how much more sense an electric car like the Chevy Volt makes if we're charging it with solar power as opposed to powering the "green car" with coal fired power plants,  because at the end of the day exchanging a gasoline car for an electric one powered by coal is a zero sum game pollution wise. 

  Considering what's at stake and the potential for phase out energy production methods that are harmful to the environment, generate deadly waste, etc, etc, I don't see how we have any other choice to but to throw government subsidies into building a robust solar energy infrastructure. It's pretty obvious that government requirements and subsidies are spurring innovation and driving adoption of solar energy in Germany, and considering the resources, land mass and (quite frankly) sunnier weather in many parts of the U.S. there is no reason we can't at least equal the figure of 30% of our electricity coming from solar energy.

I understand that it would take time to build capacity to the point where 30% can come from solar energy, but if we marshaled our resources similar to the way we approached the moon landing, WWII, etc, it could be done relatively quickly. 

I have no problems admitting that a lot of the talk around the need to abandon fossil fuels and adopt alternative energy sources is mostly dream work at this point, as you're talking about the adoption of technologies that don't yet exist. However when it comes to solar energy you're talking about a lack of adoption of a technology that is readily available, so implementing a solar energy solution is nothing more than a question of will on the part of the government and our citizens.

You can read the article in full here.

Sources:

The Financial Times: "Germany stays top of solar power league" -- Hugh Williamson,  July 27, 2008 .

The Energy Information Administration: "Net Generation by Energy Source" -- July 10, 2008.

Disclosure: at the time of publishing the author didn't own a position in any of the companies mentioned in this article.