Solar debate heats up in Germany
Over the past week, the calls for a ceiling on solar FITs have become louder from within the governing CDU party, and the announcement by grid operators on Monday that they expect the surcharge passed on to the retail rate to grow by as much as a third within the next five years has added fuel to the fire.
On Monday, Germany's four transmission grid operators published their forecast for the next five years, and it did not take long before critics of photovoltaics relaunched the debate about solar feed-in tariffs. For instance, Michael Fuchs and Joachim Pfeiffer of the CDU is openly stated that a ceiling of 500 to 1,000 megawatts per year should be imposed. But even before the forecast was published, discussions from within the government leaked to the German press over the weekend – and a ceiling of 1,000 megawatts was apparently already being discussed. In comparison, Germany installed 7.4 megawatts of PV last year and is probably going to surpass five megawatts in 2011.
The politicians have long been concerned about the relatively large sums devoted to photovoltaics, which has always provided the least amount of energy in return compared to biomass and wind power. But supporters of FITs for solar, such as German parliamentarian Hans-Josef Fell (who is also one of the original architects of the policy), point out that this level of support was temporary, and that solar is already going to be cheaper than offshore wind in Germany starting next year. Going forward, solar will continue to become cheaper faster than any other source of renewable energy.
What the grid operators added to the discussion is an estimate for the surcharge taked onto the retail power rate in order to cover the cost of feed-in tariffs (for details, see this report by Renewables International). At present, Germans pay roughly an extra 3.5 cents per kilowatt-hour to cover the cost of renewable power, approximately two thirds of which is devoted to solar alone. By 2016, the grid operators believe that photovoltaics will still require half of additional funding, which could bring the cost up to nearly 4.5 cents – an increase of nearly a third. In the 2013, the grid operators estimate that Germany will get roughly 144 terawatt-hours of power from renewables, nearly a quarter of its approximately 600 terawatt-hours of consumption.
A growing sector of the German population shares these concerns, including such proponents of renewables as Germany's Institute of Economic Research (DIW). Nonetheless, not everyone is as worried. German environmental association Deutsche Umwelthilfe (DUH) points out that the impact on energy-intensive manufacturing in Germany – one of the main concerns – is negligible because these firms are already exempt from this surcharge. And the DUH's Rainer Braake argues that "the coalition's new market bonus is the main reason behind the forecast surge in the surcharge, and it will also lead to windfall profits." The main problem, he and others argue, is essentially that an increasingly smaller base of ratepayers has to cover all of the charges as more and more firms are exempted.
Germany's Environmental Ministry has also called the forecast "greatly exaggerated" and expects the surcharge to remain relatively stable or only rise slightly over the next two years. The officials point out that the forecast also includes a liquidity reserve – and they remind everyone that the grid operators were already far off the mark in their previous forecast. The environmental officials say 125 terawatt-hours in 2013 (compared to the current 100 terawatt-hours) is a more realistic forecast of the increase in renewable power generated. The Ministry says there is no need to take action in photovoltaics because there is already a "corridor" within which feed-in tariffs are automatically adjusted based on market growth. And of course, it should be pointed out for foreign readers that Germany is not thinking of doing away with feed-in tariffs overall, as the press in the US often misconstrues discussions; rather, Germany is merely discussing whether a ceiling should be imposed on photovoltaics. (Sven Ullrich / Craig Morris)
