Germany Leads the Way in "Solar Farming"

Solar power is a reliable resource for creating electricity. The German government considered the benefits and hindrances of the technology for several years and concluded that a national incentive plan was needed in order for solar technology to succeed. Motivating this decision were two critical factors: 1) As part of the EU Energy Council, Germany agreed to greenhouse gas emission reduction targets. 2) The cost and security implications of importing vast quantities of oil and natural gas is not in the long term public interest of Germany.

Before going into the details of the German government’s subsidy program for solar energy, it is important to understand some of the challenges of solar power. There are three main challenges to widespread solar power.

Firstly, you can only generate solar energy when the sun is shining, which means the night time is a problem; finding a way to store the energy from the daytime can be expensive and require battery replacement. The amount of energy a home uses is often greater during the day, so this helps to mitigate this problem a little.

Secondly, solar power plants require a great deal of space. Additionally, transmitting solar energy through power lines results in a significant loss of electrical charge. The German government chose solar power because localized solar panels on domestic households and businesses avoided this power loss problem since the electricity is being created where it is being used.

Thirdly, and perhaps most importantly to some, the cost of solar cell installation is rather high and requires expert electricians and specialized equipment. This final reason leads us to why the German Government chose to price fix the sale value of solar power at 50 cents to the kilowatt hour. With this sale price the incentive to install solar power is extremely strong for the German public and business world. It may sound counterintuitive, but remember that with a solar panel installation at a home or business, that 50 cents per kw/h is the price the electric company pays you for your excess power rather than the other way around.

The sale of regular electricity generated by a coal plant, natural gas plant or nuclear plant fluctuates with market forces, but is additionally taxed by the German Government. This tax can be thought of as a carbon tax and acts to subsidize the high sale price of solar power. The price of regular electricity, then, ends up being around 20-25 cents per kilowatt hour. This is extremely high, and one might think that the German population would be rioting in the streets over it. However, 80% of the German public supports this solar energy incentive program. Nobody is quite sure why the German people tolerate the high cost of electricity, but it may be because they realize paying more for energy is better than consuming cheap energy that pollutes the health of the planet.

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