Solar-Powered Europe

In recent years, Germany has built an impressive market and industry base in photovoltaics. Now other European countries are following its lead. From SPIE Professional, January 2009.  Dazzling sunshine is a poetic image. The idea of powering our homes and businesses from it is also a beautiful idea. Yet there is little that is poetic about one of the heroes in the quest to harvest solar energy from sunlight: legislation.

Abengoa Solar found it much easier to design large parabolic trough fields than flat plate or evacuated tube systems, and the end result is a more efficient transfer of sunlight into electrical energy. Photo courtesy of Abengoa Solar.

Nowhere is the impact of government laws in advancing the solar energy industry more evident than in Germany. Although it is not the sunniest place on Earth, Germany has around 49% of the world’s market for photovoltaic systems.

According to the organization Invest in Germany, the total installed power from photovoltaics in Germany was an impressive 3.8GW in 2007, and a further 1.1-1.2 GW is being installed each year.

Germany’s success story started in 2000 when the government introduced its Renewable Energy Law (Erneuerbaren-Energien-Gesetz, or EEG). The law’s so-called “feed-in tariff” provides subsidies to those who feed electricity generated from renewable energy sources into the public electric grid. It also requires electric companies to buy a certain amount of electricity derived from renewable sources such as solar power at above-market rates.

In June 2008, the law was updated to reduce the subsidies for renewable energy production over time, depending on how fast the market grows. Essentially, if the German market grows as predicted, the subsidy drops a set percentage each year–to match the cost benefits of increasing production volumes and anticipated improvements in efficiency of the technology. If uptake of the technology is significantly better than expected, then the subsidy reduction will occur more quickly. If, however, the market growth is slower than predicted, then the subsidy will remain high for longer.

“There is more support if the market is not growing that aggressively,” says David Wortmann, director of renewable energies and resources for Invest in Germany. In either case, industry and the planet win. The subsidy does not come from the government. Instead, the utility companies–and ultimately their customers–pay the tariff. “The average additional cost is around €2-2.5 per month per household,” Wortmann says. “This is far less than a pint of beer, and people are generally willing to pay this because it saves the climate and creates jobs.”