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Don't Miss The Great Solar Debate: Where Does the Global Solar Industry Stand? Click Here to Register! ×

Is the End of Renewables Nigh as Fukushima Anniversary Nears?

Yes, the Germans Are Cutting Solar PV Tariffs; Yes, the Solar PV Tariffs Do Need to Be Cut; No, It's Not the End of the World

Paul Gipe, Contributor
March 08, 2012  |  14 Comments

In the run-up to the 11 March anniversary of the Fukushima reactor meltdown, the steady drip of anti-renewables articles in the mainstream media will become a torrent as the nuclear lobby cranks up its public relations machine. And they're taking aim at European feed-in tariffs, no doubt because of their success. Germany is particularly in their cross-hairs because of its massive development of renewable energy over the past two decades and its plan to close all its reactors for good.

I call this the "end is nigh" strategy. For example, expect to hear that Germany doesn't really produce much with all those renewables, doesn't really employ that many people building wind turbines and solar panels, and has finally seen reason and is abandoning feed-in tariffs.

Here in the U.S., we saw this approach at work this week when one of our most famous right-wing "shock jocks," Rush Limbaugh, trying to deflect a storm of criticism over his most-recent sexist remarks, launch a diatribe that building wind turbines and solar panels does not create "real jobs." That leaves one with the impression that the only "real jobs" are those involved with building, or repairing nuclear power plants — or, we should add — trying to save them from destruction.

Since the 1930s, the key to effective propaganda has been to build it around an element of truth. Thus the media and the blogosphere — at least here in the english-speaking world — are having a field day after learning that Germany's conservative ruling coalition of the CDU and FDP (with particular prodding from Philipp Rösler of the FDP) have reached an agreement to dramatically cut feed-in tariffs for solar photovoltaics (solar PV) even more than already scheduled.

With this background in mind, here are some thoughts on what to expect and how to react to the "end of renewables is nigh."

Always check with german- or english-speakers who live in Germany about what is happening in Germany. (The same can be said for news about France, Italy, Spain, and Portugal.) There is a language barrier. Though a lot can be found in english, I've found some appalling translations of german news.

Check with a German or Someone in Germany

One excellent method — one that I use myself — is to look for articles by Craig Morris at Renewables International. Morris, an American, lives in Freiburg, Germany and writes in English about renewable energy. That's a combination that can't be beaten. He knows his stuff, and writes insightful articles on the differences in how Germany and the US develop renewable energy.

Yes, the Germans Are Cutting Solar PV Tariffs

Yes, the CDU and FDP have reached an agreement. Yes, the proposed cuts are severe. Yes, they are more severe than expected. Yes, the industry is howling and there was a demonstration this week in Berlin attesting to that. These are the facts.

However, the cuts are not final until the "fat lady sings." In this case, they aren't final until the Bundesrat makes its decision. The CDU-FDP rule the Bundestag. But laws don't become official until the Bundesrat, the second chamber, rules. This is one good reason why it is important to understand the political dynamics with the help of someone familiar with the system. The Bundesrat's authority is limited, but it exists and it is there for a reason.

Just this week a politician from the CDU's sister party, Bavaria's CSU, said the cuts were too draconian.

The situation is fluid, to say the least.

Yesterday a post by Craig Morris suggests that the cuts will now be delayed to April.

Stay tuned.

Yes, the Solar PV Tariffs Do Need to Be Cut

Yes, the installation of solar PV must be reduced. 7,500 MW per year is too much for the German market. In two years, Germany has installed 15,000 MW. They now have a total of 24,000 MW of solar PV.

The target last year was 2,500 to 3,500 MW. The current proposal maintains that target. The proposed cuts are intended to slow installations to the targeted amount.

Reasonable people can disagree on how much the tariffs need to be cut to reach that target.

No, this isn't the end of the world. No, it's not the end of renewables in Germany — nor is it the end of Germany's feed-in tariff policy.

The annual targets for solar PV in Germany still represent twice the solar PV installed in the U.S. last year.

The proposed cuts only apply to solar PV.

Yes, Germany's Electricity Rates Have Increased

Despite Rösler's claims — repeated ad nauseum over here — that the solar industry is destroying the German economy, the fact remains that increases in the cost of electricity in Germany are largely due to increases in the cost of conventional fuels. While renewables have contributed, they are far from the leading cause.

Moreover, as Morris reports, surveys continue to show that Germans are willing to pay for the energy transition from fossil fuels and nuclear to renewable energy.

No, It's Not the End of the World

Regardless of the cuts, German development of renewable energy remains a remarkable success at driving down costs, especially that of solar PV. As a result of its feed-in tariff policy, Germany has cut the cost of solar PV to one-third of that just a decade ago!

German solar today is significantly less costly than solar PV anywhere in North America. And German solar PV will be even less expensive than anything on this side of the Atlantic after the new cuts go into effect.

So, no, this isn't the end of the world. It is a sign of a maturing market. 

Confusing Energy and Electricity

Some conservative academic commentators on the situation in Germany have made some truly egregious errors in their attempts to belittle what has been accomplished. These are errors so serious it calls into question their intellectual integrity, if not their competency.

The most serious error is confusing the mix of renewable resources in Germany's electricity system with that of the country's energy mix of "energy" sources. Electricity is only a part of a country's energy mix.

The Germans are good at publishing data in English on the role of renewables in both electricity and the broader energy market. This data is not hard to find.

In 2011, renewables — for the first time in the modern era--contributed more than 20 percent of "electricity" consumption. German solar PV alone delivered more than 3 percent of "electricity" consumption last year. This is a simple fact that can't be ignored.

And despite closing 40 percent of its reactors after Fukushima, Germany was still able to export 5 TWh — about 1 percent of total generation — to neighboring countries.

What's Coming Up in Subsequent Newsletters on Feed-In Tariffs

For those new to this list, let me explain that I don't cover every development on feed-in tariff policy worldwide. Feed-in tariffs have become the renewable energy policy of choice across the globe and most industry news outlets cover the day-to-day events more effectively than I alone can.

I'll continue to post links to news reports by others, such as by Craig Morris, about feed-in tariff developments around the world as I have been doing for some time.

I'll also continue post articles on what I consider are key developments in feed-in tariff policy, as well as articles or the growing role of renewable energy due to the success of feed-in tariffs in various locales. This is often best done after the political and regulatory dust settles and a new policy goes into effect.

Toward that end, I plan to post a series of upcoming articles on revisions to feed laws in several countries and regional jurisdictions.

First up will be an article by Toby Couture on Spain. Couture, a world authority on feed-in tariffs, will examine Spain's recent suspension of its feed-in tariff program, part of what I call the "end is nigh" series.

Image: Cousin_Avi via Shutterstock

14 Comments

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Roy Wagner
Roy Wagner
March 20, 2012
Thank you Paul for an honest reporting there is so much hype from both sides of the argument.
The reason the Germans are cutting back on feed in tariff's is because the program designed to encourage Solar Installations was too successful.
Almost double what they expected all they are doing is slowing down not quitting.
Lawrence Carroll
Lawrence Carroll
March 15, 2012
Hey Bill,

Great post. If this was facebook, I would give it a "like" for sure!

Regards,

jaja
William Fitch
William Fitch
March 14, 2012
Hi:

Just because Nukes do not "breath" CO2, does not mean they are safe or desirable for this earth. Radiation is far worse then CO2. CO2 warms the planet, yes, but CO2 will not split your DNA or cause cancer or any one of a dozen other terrible conditions. CO2 will not make land uninhabitable forever. The list goes on and on. The whole idea of the Nuke industry trying to piggy back on the real renewable's industry, based on no CO2 emissions is bad joke. Great marketing and sales though...

.....Bill
Lawrence Carroll
Lawrence Carroll
March 14, 2012
To johnhart,

'Promises, promises' is perhaps the main thought that comes to mind.

If you're honest and objective, you might remember that the nuclear lobby has always assured us BEFORE the various accidents and 'semi-accidents' and 'near accidents' etc. that nuclear power was safe as it existed at the time these incidents occured. Thus, your belief in the new generation of reactors seems like the 'same old same old.'

Various assurances that the more catastrophic accidents overseas were not something that could happen here - that they were caused by different reactor designs, and by poor management seem very flimsy. As news comes out regarding the problems we have here, many of us are not reassured. We feel it is only a matter of time before a 'big one' slams us domestically. Many problems were revealed during the period after Fukushima when Obama called for a review of current conditions at domestic plants. Without Fukushima, this review would not have happened, and as can be seen already, nuclear advocates have already forgotten Japan and its GE reactor.

This just in (from Democracy Now!) (actually I heard about this about this time it happened, probably from Union of Concerned Scientists):


'NRC: Fire at Nebraska Nuclear Plant Posed Serious Safety Risk

A new report by the Nuclear Regulatory Commission has revealed an electrical fire at an idled Nebraska nuclear plant posed a high safety risk because the fire knocked out pumps circulating water in a pool with spent nuclear fuel. The fire occurred last June at the Fort Calhoun Nuclear Station shortly after the reactors were idled due to massive flooding. The NRC said it classified the fire as a 'red' event, representing the highest level of safety threat tracked by the agency. The report also criticized workers at the nuclear plant for ignoring an 'acrid odor' at the plant that existed for three days before the fire began.'
John Hartshorn
John Hartshorn
March 13, 2012
I fail to understand why there is so much hostility toward nuclear power in the renewables community. Nuclear and renewables compliment and reinforce each other and we must develop both to their maximum potential in order to make a full transition away from fossil fuels in time to avert the worst effects of climate change. We can't afford the luxury of following a renewables only path due to very real cost and reliability constraints. Nuclear designs are constantly improving. You don't drive a 1960 automobile because the new ones are so much more reliable safe and economical. The same is true of nuclear power. The generation III plants now entering service are significantly safer and less costly to build, and Gen IV plants like the GE - Hitachi Prism design
http://www.ge-energy.com/products_and_services/products/nuclear_energy/prism_sodium_cooled_reactor.jsp will be able to consume the accumulated waste from current reactors, extracting the 99% of untapped energy remaining therein, while being incapable of melting down. We need to acknowledge the reality that alternatives can never do the whole job alone at a price that meets societies needs. Don't let your enthusiasm for alternatives turn you off to the very real benefits of generation III and IV nuclear power.
Lawrence Carroll
Lawrence Carroll
March 13, 2012
Hey Bill (#8 - hey it feels like one of those futuristic nightmare movies: "Come in # 7" et. al)

I used to watch DN all the time, but yeah, it can get you down. But in morderate or sporadic doses it acts (for me) more as a mood elevator rather than a depressant. Dosage is so important! :)

Enjoy!
William Fitch
William Fitch
March 13, 2012
Hi:

#7, would agree totally... I watch Democracy Now all the time..
until it gets too depressing...
Yes, it is just a puppet show, the same hands make both red and blue marrianets dance... but you have to keep up the appearance of a difference, to keep the natives from getting too upset.

.....Bill
Lawrence Carroll
Lawrence Carroll
March 13, 2012
In all the talk about the insane conservatives like Limbaugh, don't forget that it was President Obama (mainstream Democrat - not exactly a Ralph Nader or Cynthia McKinney or Dennis Kucinich etc.) who originally pledged loan guarantees for new nuclear plants . . .

From Amy Goodman's column, March 7th, 2012:

"Just about a year before Fukushima, President Obama announced $8 billion in loan guarantees to the Southern Company, the largest energy producer in the southeastern U.S., for the construction of two new nuclear power plants in Waynesboro, Ga., at the Vogtle power plant, on the South Carolina border."

It's funny, but I don't see any criticism of him for that here. Nor do I ever hear ANY mainstream Democrat criticizing themselves for being so eternally "on the fence" for supporting candidates like Obama for their love of nuclear power, or for accepting the "need" for monstrous amounts of money from corporate donors (like BP, Exelon etc. etc. ). According to them, they are all "sweetness and peace," and the only villains in the room are those "bloody republicans."

In committing themselves to promulgating such an absurd lopsided, erroneous view of the world, they are as guilty as the conservatives for muddying the mental waters and polluting the public mind. Thanks to Obama (and both his Republican and Democratic presidential predecessors) we still have dangerous nuclear power plants, and if they continue in their endless compromise with the huge corporate-state-military/industrial complex, we always will.
William Fitch
William Fitch
March 11, 2012
Hi:

Nice article. Both the RE market and the 'proper' amount to add thrust to it are moving targets. ...much like being on a very bumpy dirt road shooting at a rabbit with a .22 cal. at 100 yards. The best you are ever going to get is close...
As far as the ER (Extreme Right) propaganda machine, I like the German analogy. Why doesn't someone get a head shot of Paul Joseph Goebbels, Josef Rudolf Mengele and Rush Limbaugh and combine them??
Oh wait, I already did that. See: www.wearesolar.com go to the link on the bottom left titled, informative articles/misc. Scroll all the way down and you will see Rush's new 'team'.. Just a joke of course...
Anyway, when it comes to the never ending flow of garbage from the right, which is really just the extreme money that desires the M/S relationship for mankind VS helping the masses, you just have to realize that going point by point in a rational manner really has no purpose. No matter what you say or how reality really is, they will twist, deny, lie, what ever it takes, to keep the money flowing. I think the RE people would do better realizing the futility of this path and just get on with business, 1 then 10, then 1000, then 10,000 systems at a time...

.....Bill
Karl-Friedrich Lenz
Karl-Friedrich Lenz
March 11, 2012
A couple of points on the latest round of cuts.

For one, the present Government has opposed the feed-in tariff law when it was introduced in the first place by the Social Democrat/Green coalition. It is not ever so surprising that they are somewhat less enthusiastic in supporting it.

That is especially true for the Free Democrats, who now get the post of Economy Minister. Fortunately their support is now low to non-existing, so next year's election might lead to some improvement.

The most damaging aspect of this round was the fact that they announced it with just 3 weeks warning. The reason for that was the desire to avoid a last-minute boom, which has happened repeatedly recently.

That is damaging to the reliability of the system. A low but reliable tariff is always better than a high tariff that may disappear overnight.

It will be interesting to see if anybody is actually able to pull off large-scale projects at 13.5 cents (euro) per kWh in Germany, with solar resources equivalent to Alaska. I am not convinced of that, but if that is actually possible, that would be excellent news. It would mean solar PV at about 8 cents (US) in better locations like U.S. deserts.

And if that particular decision actually gets enacted as law, the resulting slowdown in the German market will of course lead to prices dropping even faster everywhere. Good news for all other markets.
George Reynoldson
George Reynoldson
March 9, 2012
Much thanks to Paul Gipe for this excellent article, and especially for connecting current energy politics to current right wing radio rhetoric.

Like Germany today, policy incentives for US solar in the late 1970s overheated the solar industry so much that right wing politicians (Reagan, Bush, Edwards, Watts) were given the chance to step in and totally deflate the expanding solar industry to the benefit of oil, gas and coal interests.

Coincidentally, about once a year, I force myself to listen to Rush Limbaugh for up to an hour so I can stay connected to what the other side of the dial is doing, and (un?)fortunately yesterday (3/8/12) was one of those days. And, it was VERY ALARMING!

His "thinking" on environmental whackos, US economic policy and renewable energy paralleled the insanity he displayed earlier in the week with his sex-related remarks. Mr. Limbaugh is a very sophisticated propagandist (fact rapist?) who would have found easy employment in Germany in the 1930s while Jewish populations were being undermined within a nationalist fantasy of "weeding the garden" for the "greater German good".

Yes Mr Gipe, this appears to be just another right wing nuclear/hydrocarbon vs. left wing solar dogfight for "real men's jobs" within an Orwellian dialectic.

I challenge REW readers, especially older solar folks who participated in solar energy promotion in the '70s and early '80s to listen carefully to the Fox/Limbaugh/Beck "American dream" and see if you don't feel something strangely familiar: an energy market imbalance translated into political propaganda.

Thanks again, Paul.
Gerry Wootton
Gerry Wootton
March 9, 2012
@shafflo: "The prices fell so much last year for PV that the automatic adjustment that took place in January was too little." - indeed. Even Germany with it's finger on the pulse and prediciting price reductions missed the depth of the cuts but then nobody expected that major producers would take the big cuts in margin that they did. 20/20 hindsight is a wonderful thing! Meanwhile, the CASM affair shows that many US players were caught with their pants around their ankles and US politicians can't even find their pants. Meanwhile, the Germans at least have a regulatory process in place and a market, which despite the huge disturbance, is still in control.
There are many detractors who present totally mathematically inept arguments. For example, I have seen many arguments to the effect that the cost of some new technology which represents a few percent of the total market or even less is responsible for 100% of the market price variation. In some cases, there is a bass-akwards supply and demand thinking at work and even a little deception. For example, coal power producers blame increased prices on environmental controls which in fact they have not implemented or which only add trivially to their LCOE (in one specific example a 5% rate hike was triggered by a future 0.5% cost of production increase). What all producers want is more profit. One can make a better case for increased demand relative to supply for driving up the market price. Dull and boring but since demand is increasing in every market, prices will go up unless new supplies come on line at a much faster rate than old ones retire. Fully amortized producers want to see a high RoR on new capital investment: if you compare the consumer cost for adding pollution controls and/or GHG controls to exisiting thermal plants in proportion to capex, thermal plant operators are making out like bandits.
There are 255 humans born every minute: statistically, a high probability of at least one sucker.
Dharmappa Barki
Dharmappa Barki
March 9, 2012
This article is good because its reporting on some facts is subtly disturbing! The human race is very nasty and there's nothing good to this race than its end.

Firstly, industrialization is the worst thing that has happened to this world. Global warming is the bane of such industrialization. Man is wholly responsible for this mess.

The developed world, esp., America, has set a very bad example to the new generation. The world is living in excesses and is damaging the earth irreversibly. The US and Germany among many developed nations started embracing the renewable energy for the past couple of decades. Shown huge interest to shut down nuclear power stations and promote solar energy in a massive scale. But after the US economic meltdown followed by the recent European financial crisis, now they are talking exactly opposite! Germany contributed immensely to the solar PV to develop through its FIT program. It's unfortunate that it has now slowed down its interest in solar. This trend is not good to the world. As the author of this article rightly points out the very 'intellectual integrity' of these developed nations is under question. Just because the economy took the beating ecological issues, be it use of fossil fuels based energy or saying 'no' to nuclear energy, cannot be brushed aside. We should stop linking ecological aspects to economy and the profits. Ecological assets and liabilities should form the central theme of modern economy.

The article opens up the debate once again to remind us of what Dave Forman, Founder of Earth First, prophetically mentioned, "Phasing out the human race will solve every problem on earth, social and environmental". I do not think, any developed nation on this earth can handle one more Fukushima meltdown, let alone economic- or ecological meltdown! Are developed and developing nations listening?
Louis Shaffer
Louis Shaffer
March 9, 2012
Good article. The fact is that Germany aims its FIT at offering a reasonable return on investment for PV to keep the market growing. The prices fell so much last year for PV that the automatic adjustment that took place in January was too little. They are already at the point where basically you get less when you 'sell electricity' to the grid than when you 'buy' electricity.

What is critical to understand about Germany electric bill and the amount that is due to renewables (around 14%) is that this is not due to this year's policy or even last yearss. It is the accumulation frmo past years where this tarrif was much higher. In other words, no matter what they do now, that is in for the next 15 years or so. The new solar will add very, very little.

The US excepting a few states should be embarrased by how much Germany and now China and most countries in Europe are ahead in Renewable energies.

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Paul Gipe

Paul Gipe

Paul Gipe has written extensively about renewable energy for both the popular and trade press. He has also lectured widely on wind energy and how to minimize its impact on the environment and the communities of which it is a part. For his...
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