Four Lessons Learned from Germany’s Solar Energy Program

Without a doubt, Germany is at the forefront of renewable energy in the world. Energiewende, the German term for energy transformation, is not just a government policy: it’s a new way of life, supported by the vast majority of German citizens. In the relatively short time period of 15 years, Germany achieved an amazing feat: once dominated by nuclear energy and fossil fuels, it’s electricity mix now has a rapidly growing share of renewable energy. At times, this transformation has been painful, and rising electricity prices has been a concern for many German taxpayers. However, the nuclear tragedy at Fukushima and many green jobs created by Germany’s investments in renewable energy bolstered the resolve of the general population and breathed new life into government policies aimed at increasing the role of wind, solar, hydro and biomass in Germany’s energy system.ID-10087953

According to the German Federal Ministry of Economics and Technology, the share of renewables in electricity generation was around 5% in 1998, but today it surpassed 20%. The aim is to push this level close to 60% by 2050. Currently, solar energy provides about 5% of the total electricity consumption in Germany. Although 5% may sound low, it’s actually one of the highest levels in the world.

Here are four important lessons that emerge from Germany’s Energiewende:

1. Ownership of energy matters

One very interesting distinguishing feature of Germany’s renewable energy market is its ownership structure. Just like major sports teams in Germany, renewable energy is predominantly owned by the general public. Whether it’s cooperatives, individual ownership or small businesses, almost half of the installed capacity is owned and operated by private individuals. Big corporations also own and operate renewable capacity, but they do not dominate the scene. The large share of private ownership is one of the reasons why there is grassroots support for renewables in Germany, as the economic benefits are widely distributed.

2. The solar resource is just part of the story

Germany has a very modest level of solar energy resource. For example, even a relatively sunnier city in the country, Munich, has a low Solar Score of 35. Thus, purely from a solar resource perspective, Germany is far behind many other countries in the world. German Association of Energy and Water Industries (BDEW) estimates that the solar capacity factor is around 11%. However, when it comes to solar electricity output, it is leading the pack. This is largely a result of massive investments that were made in the last decade and the impressive total installed capacity of around 32 GW as of 2013 (for more information about how to interpret these numbers, please see this previous article). This is equivalent to two solar panels per German citizen. Thus, with the right mix of incentives and wide public support, solar energy can be viable even in countries with modest solar “reserves”.

3. The pace of change can (sometimes) surpass most optimistic forecasts

Renewables in Germany since 1990 (source: German Federal Government)
Renewables in Germany since 1990 (source: German Federal Government)

Radically changing the composition of an energy system is no easy feat. Comparing solar energy statistics from just a few years ago to today’s figures reveals an amazing transformation. According to the German Federal Government, in 2006, the installed solar capacity was around 3 GW and solar energy generated less than half a percentage of Germany’s total electrical consumption. Today, installed capacity is around 32 GW and the share in consumption is about 5%. In other words, in less than a decade, the share of solar energy increased tenfold at the expense of nuclear power plants and fossil fuel generators. Thus, the relatively small share of solar and wind energy today is just the beginning.

4. Don’t let the average solar output fool you

The average solar electricity output may be around 5% of the total amount consumed in Germany, but this is just the annual average. On a clear summer day, the share of solar electricity can reach more than 20% of total consumption. In July 2013, Germany broke quite a few records and demonstrated the whole world that it is indeed possible to imagine a future, where renewable energy plays a very important role. Combined with the unique strengths of other renewables, such as wind and hydro, and managed by a smart grid, solar energy is poised to be a major contributor to tomorrow’s electricity systems.

Image credit: / domdeen

Leave a Reply

Your email address will not be published.