This is a Google translated version of an article that appeared in the German news today:
From German newspaper: Berliner Zeitung
The promotion of solar energy provides companies huge revenue. But the benefit is doubtful
19.11.2007
Economy-Page 15
Jakob Schlandt
BERLIN. German Environment Minister Sigmar Gabriel is difficult to tame when it comes to the German solar energy industry. The promotion of the Renewable Energy Act (EEG) Gabriel hailed as a "success story for climate protection, energy supply and jobs."
There's just one snag: The Germany promotion of photovoltaics is highly questionable and economically, the consumer in the next dozen years is on the hook for many billions - even given the rising cost of electricity.
That is the conclusion of the Rheinisch-Westfälisches Institute for Economic Research (RWI) in a paper that will be published in January. A team headed by the chief of the Environmental Research Division, Manuel Frondel, has calculated how high the costs for consumers are from the current Renewable Energy Act alone for photovoltaic.
First Solar millionaire
The numbers are enormous: By the end of this year, there will be enough installed PV systems to require 20 billion euros in irrevocable payments over 20 years to the photovoltaic operators in addition to what would be required by the normal price of electricity, even considering inflation.
But this is just the beginning. Under the current subsidy, RWI estimates 2010 obligations to be over 28 billion, and by the year 2020 the gigantic sum of 57 billion. "These are the assumptions for the study to be more careful," says Frondel. The enormously high remuneration, introduced 2004, has led to an unprecedented boom. By the end of 2006, around 200000 plants were in operation in Germany, about seven times as many as currently 2003. Now a good half of the global photovoltaic capacity in an often cloudy country with weak sunlight - even in Spain about 50 percent more can come from the same PV cells.
This is not because of the environmental consciousness of the Germans, but simply financial incentives. Give 20 years of set fixed rate prices, the construction of a solar power plant is currently an almost riskless investment, with a neat return on equity of eight to ten percent rate the industry estimates.
But truly fantastic margins are generated elsewhere: at the manufacturers of the equipment. Given the almost impossible to breastfeeding by the EEG-fired demand, the production costs of the sale price uncoupled-the company can require as much as the law can.
Solo since the beginning of the year Solar shares rose on average by almost 96 percent. The companies strotzen before self-awareness and raise profit forecasts further. Q-cells example, the German market leader and the world's number two in solar cell production, will in 2007 turn a profit of 120 million euros with 800 million-euro revenue. Within two years sales doubling is a typical forecast in the industry.
Already there are the first Sonnenmilliardäre: Frank Asbeck, chief of the Bonn SolarWorld AG, holds a quarter of the company. And that is on the stock market at around 4.5 billion euros.
This high market value is quite understandable: "The EEG-Novelle 2004 led to a strong stimulation of demand by the solar industry nationally guaranteed returns," says RWI-Wissenschaftler Frondel.
The Federal Association of Solar economy interpreted the huge profits and sales growth differently. "Of course, the promotion of solar energy is not getting to zero", defended CEO Carsten Körnig the EEG-Vergütung. They increase the chances of German companies enormously, in a market of the future a good position to conquer. " "In Germany, the solar industry, the car industry, even as some major industry to replace. Now, we should not in the middle of the lane to the foot of gas." The companies would also not yield billion commodity, but in research and growth investing.
But the vision of the great future of the EEG unleashed by the German solar industry will be questioned by RWI. "With the extremely generous allowances are so comfortable conditions that German companies hardly the tough competition abroad suspend," says Frondel. In addition, a large portion of the equipment manufactured abroad. The market leader is currently Japan, and the expansion plans in China, Norway and the United States far exceed the projects of German manufacturers.
It is only that the German EEG gives world photovoltaic industry a huge boost – the industry is funded but almost solely by the German electricity customers. Sinn Voller, said the researchers, would be part of the money in research and development to invest up to the fact as cheap photovoltaics can be offered that make massive expansion worthwhile.
Conclusion
Also, the employment impact falls under the RWI-Berechnungen given the enormous purchasing power losses for the poor population. And not once in climate protection is the photovoltaic currently compete. The carbon dioxide reductions are extremely expensive, requiring more than 800 euros to be paid to displace one ton.
The conclusion of economist Frondel drops scathingly: "The EEG is a very inefficient form of support, it could also cost madness to say."
The Federal Ministry of Environment are not ignoring the escalating costs. They plan to reduce payments due to the Act from 2009, and then afterword and then by seven to eight percent per annum. This should be a one-time reduction of one cent. In December, the proposal well be acted on in the Federal Cabinet. But even still the Gabriel plans would pay approximately 40 cents per kilowatt-hour in 2010, and the profit margin of manufacturers would be expected in view of their cost cuts even further increase.
To the already existing billion cost at least limit, advises the RWI to be a much stronger annual reduction with a strong tee-off. "There must be a clear signal, that it could not go," says Frondel.
20 years Price Guarantee
Graphics: Billing: The Renewable Energy Act (EEG) has a nice feature for politicians: It costs the state nothing. The billions for the promotion erneuerbarere energies are in the electricity bills of consumers hidden. Who is a solar system builds up on the roof, the current 20 years at guaranteed prices in the electricity network launch. For small house roof systems are currently just under 50 cents, nearly ten times the wholesale market price for electricity. The power companies the costs may be on the bill of the consumer beat.
