| Learning from sunny Germany |
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| Written by Will Krechting | ||||||||
| Monday, 30 June 2008 | ||||||||
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This article first appeared on Business Spectator (www.businessspectator.com.au ) on June 10, 2008 Early last week, Bosch, the world’s largest supplier of automobile components, launched an unexpected €550 million takeover bid for East German solar panel producer Ersol. In the following hours, Ersol shares jumped 60 per cent on the German technology index, TecDAX. Bosch’s bid, though a surprise to many, was precisely timed. Only a few days before, the German government had decided to retain the Erneuerbare-Energien-Gesetz legislation (EEG) – literally the Renewable Energy Law – that has been in place since 2000. The EEG offers cash incentives to people developing renewable energy sources such as photovoltaics. A national feed-in tariff allows power firms to buy solar electricity from the private producer that feeds it into the grid for a price ranging from 35 to 47 euro cents (57 to 77 Australia cents) per kilowatt hour, depending on the scale of the installation. Under the scheme, the price difference between conventional and solar electricity, which is up to triple market prices, is effectively being apportioned among all German citizens, something that has stirred much controversy. For instance, the Christian Democratic Party (CDU) – one half of the ruling coalition Merkel government – has called for a 30 per cent cut in the incentive to “unburden private households”. Yet pressure from the Social Democrats – the other half of the coalition – convinced the CDU to keep the laws largely intact, and only minor cuts of 1 euro cent/kWh will be made to the rebate in 2009. Experts consider the EEG the single most important factor in the growth of the German solar energy market, and the figures confirm it. Since the introduction of the EEG in 2000, the number of solar installations in Germany has risen enormously – there are now more than 300,000 photovoltaic systems installed on roofs of predominantly private households, generating a total of 3.5 billion kWh, representing 55 per cent of the world’s photovoltaic power generation. From 2006 to 2007, the number of installations rose by 60 per cent; €4.7 billion ($A7.7 billion) had been spent on photovoltaic systems in the last year. The effects of this development are obvious. The German photovoltaic sector has created 40,000 new jobs and new companies are burgeoning. Already seven of the 30 companies comprising the TecDAX index are solar companies. Such growth in a relatively cold, cloud-covered nation might surprise some, but the effectiveness of solar cells is so high that they are capable of generating electric current even under moonlight. And one of the most important effects: in 2007, the government says, 2.4 million tonnes of CO2 emissions were cut through photovoltaic power alone. For sunny Australia, there's much to be gleaned from the experience of a country which is covered by clouds between 60 and 75 per cent of the time. It might be argued that investing in solar just not affordable for a nation like Australia, though that would not be an easy case to make. GDP per capita for Australia ($US36,258) is actually higher than for Germany ($US34,181), according to the IMF. Of course, GDP per capita does not tell the full story. Germany has a household savings rate that is 12 times the Australian rate (11 per cent vs 0.9 per cent) and a very different attitude to investing: Germans, on the whole, prefer longer-term investments, including sinking money into their own properties. But more important than the financial side is Germany's recent history. There was a rapid growth in ecological awareness in Germany in the 1980s – the German terms for 'forest dieback', ‘acid rain’ were everywhere plus, of course, there was public outcry over the reactor disaster in Chernobyl. Together these led to the increase in the support of the Green Party and the founding of the Department of Environment in the course of the decade. Australia does not need a Chernobyl to raise public awareness of solar power – it just needs government that takes seriously the lessons of Germany, where the state's contribution was a vital factor in rolling out the technology. But it seems that Australia is turning in the wrong direction. Last week, federal environment minister Peter Garrett was criticised for justifying reductions in the solar rebates program, saying that if it “had continued the way in which it was constructed previously, it is agreed by both industry parties and others that it was overheating". Curious indeed, considering that a “overheating” of the solar industry failed to appear in Germany. Australia’s ‘Solar Homes and Communities Plan’ needs major improvement. Firstly, because it does not include a nationwide feed-in tariff which was the crucial factor in the Germany experience. Secondly, because now it is only available for those households with a taxable income less than $100,000. Solar power has even greater potential in Australia economically, environmentally and technologically if the nation is able to become fully aware of how much solar energy it has available – and if state and federal governments can show something like the level of commitment shown by politicians in Germany. Will Krechting is a freelance journalist based in Melbourne. He has previously written for the German newspapers Die Welt and Hamburger Abendblatt.  Quote this article on your site | Views: 431
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