Why is Germany supporting feed-in tariffs for solar PV? Why is a country in northern Europe spending billions of dollars to buy solar cells just so that they can pay technicians to install these cells on home that hardly see any solar radiation? There are parts of southern Europe that can see over twice the amount of average solar radiation as in Germany. Note that the manufacturing of these cells produces significant amounts of greenhouse gases. Home-installation of solar PV panels in Germany is one of the silliest things I've heard of, and we've got some silly programs here in the US (such as corn ethanol production.) [And by silly, I mean it has a negative, unsubsidized rate of return on investment and also causes an increase in the amount of greenhouse house gases than if the policy had not been followed.]
Given the recent election losses for the center-right party in Germany over the last half a year, I foresee even higher electricity prices in Germany and even more problems as the left-leaning, feed-in-tariff-friendly parties gain more political power. How does Germany expect to be generating its electricity in twenty years? Below are three problem areas that could cause Germany to lose its relative standing in the EU (compared to France) and in the world (compared to China, India). By the way, France is the only country in the EU will a decent 'energy' (i.e. 'exergy') policy. If France can continue to stick with 80% electricity generation from nuclear power and move consumers to electric powered vehicles, I expect to see France emerge as a relative power-house in Europe. (Note that the UK is still following similar feed-in tariff follies. UK feedin tariffs )
Problem#1: $0.50/kWh feed-in tariff for solar PV
Currently, the building and installing of solar panels costs more than the solar panels could generate in electricity sales over their lifetime in an unsubsidized market. So right now, the only way to make them economically viable is to have large state and federal subsidies. But just because there are subsidies, doesn't mean that building these panels isn't an overall drain on their economy. The taxes that must be paid to support the feed-in tariff (or the increase in the overall price of electricity) means that this policy is a net drain on Germany's economy. A much wiser policy would have been to invest more money in solar PV R&D before subsidizing the mass-scale production of a technology that currently consumes more electricity in the production of the PV cells than the PV cells can generate over their lifetime. Since a significant portion of the electricity used to manufacture these solar cells can come from fossil fuel combustion, it's possible that this feed-in tariff policy is both wasting of money and causing an increase in greenhouse gas emissions.
Problem#2: Idling of 7 of the their 17 nuclear power plants
The German government just recently decided to idle the oldest 7 of their 17 nuclear power plants over concerns about their safety. I do not want to speculate on the safety of these power plants, but what I'm concerned here with is that it leaves Germany with less options going forward. How does Germany expect to grow if it closes existing power plants that produce GWs of electricity and is throwing money at the installation of solar cells that consume more electricity than they will generate?
Problem#3: Will shutting down of some German coal mines lead to shutting down coal power plants?
Germany current plans to first close unproductive coal mines by 2014, followed by all hard coal mines by 2018. (Subsidised coal mines to be closed in 2014) The subsidies to German coal mines over the last forty years has been substantial. It has been estimated to be roughly $4,000,000,000 euros per year. This is roughly the same size per year as the subsidies to solar PV (that have been promised for the next 20 yrs). While the shutting down of coal mines that are expensive to run (compared to the strip mines in the Powder River Basin of Wyoming) is a good thing, the problem will be if Germany decides to close coal power plants to focus on low-to-negative rate of return on investment technologies such as solar PV or off-shore wind. If a coalition of left-leaning political parties decides to shut down coal power plants in Germany, then Germany either will become an electricity importer, or will become highly depended on natural gas from Russia, or will watch its economy shrink, or some combination thereof.
One of Germany's stated goals is to cut the national electrical consumption 50% below 2008 levels by 2050. Germany defines sustainable energy policy up to 2050 Here's the problem with cutting electricity consumption:
If you save money by not using electricity in a wasteful manner, then you still have that money and can spend it on other, more productive purposes that still require electricity. For example, if I decide to save money and gasoline by car-pooling, then I have more money to spend on more productive actions, such as investing in the stock market. Improving our 'energy efficiency' cause us to consume more electricity, not less. This is called the Jeveon's paradox. Jevons Paradox
So, there is a difference between cutting national electrical consumption by 50% and trying to stop wasteful use of electricity. To have 50% less electricity consumption, you have to actually decrease the size of your economy. So, it appears that Germany's goal is to shrink its economy. This is a problem since the goal of life is to grow and to expand. Germany seems to be purposely trying to shoot itself in the foot, and then drag us all down with them as they start asking for bailouts from their failed electricity policies. Electricity consumption is a good thing if it is used to grow the economy. Why do Germans want to make their economy smaller?
Germany will pay a price for its wasteful feed-in tariff policies. There will be a net-increase in greenhouse gases due to Germany's feed-in tariff policy. What people forget is that solar PV is not a "green" technology when the electricity used to generate the PV cells comes from fossil fuels. Since a significant number of the PV cells that Germans bought were imported from China, what happened is that Germany created a policy of paying China to pollute.
This is the folly of blindly following environmental causes without doing your homework first! You could think that supporting a politician who supports feed-in tariffs for "green" energy is a good thing, but then you might be supporting giving money to China to pollute and increase the amount of greenhouse gases compared to not-having the feed-in tariff.
What I'm trying to say here is that you have to do your homework before you support politicians who want to take your money to develop large-scale projects or give feed-in tariffs to technologies that consume more electricity and money than their produce over their lifetime.
Germans need to think clearly before their take their country off a cliff by closing nuclear plants, closing coal mines/plants, and giving feed-in tariffs. If they continue to do this, then they will have less money available for life's luxuries (science, health care, entertainment, athletics.) Germans need to calculate the return on investment and rate of return on investment of the electricity generating technologies their government supports. They are currently supporting feed-in tariffs for technologies that have negative, unsubsidized, inflation-adjusted return on investment. And supporting technology with negative return on investment is no better than paying people to do nothing. And that is where Germany is heading unless they figure out how to build electricity generating power plants with a rate of return on investment greater than 10%/year.
[Note: this is not an attack on solar PV technology, per se. I am in favor of increasing R&D in the area of solar PV, and I believe (as indicated in previous posts Self replicating solar robots) that we need to invest heavily in self-replicating solar robots. The population of self-replicating solar robots can't increase unless their rate of return on investment is positive. My problem with Germany's feed-in tariff policy is that it allows for the mass production of solar PV technology with negative rate of returns on investment.]