Germany vs. USA – Can you spot-the-difference?

April 29, 2014 MODsolar Admin

Recent figures indicate that the United States generates just 0.4% of our energy from Solar. In Germany, this number is up to 28%. What is the USA doing wrong and how can we work to close this gap?  This is something we think about a lot here at ModSolar.  Our stated mission is to help the solar industry achieve the scale our society needs from it.  Germany has proven it’s possible.  So why hasn’t it happened here?

What we have seen in Germany indicates that what the US needs is a clear signal from the federal government that renewable energy is a priority. Continuing to support fossil-fuel generation is completely unsustainable in the long term and the government must decide to move the country in a different direction.

In Germany, beginning in the 1980’s, the government began to prioritize wind and solar power. Since then, they have closed nuclear power plants and introduced a FIT (Feed-In Tariff) which subsidies renewable energy by taking money away from big polluters. And it’s working. There were over 100,000 people working in the solar industry in Germany in 2011 and they set a record of 5.1 terawatt-hours in July last year.

It is still up for debate whether or not a FIT will work in the United States. Carbon pricing in the form of a tax might be a better solution. Whatever shape policy might take, the important thing is that the government sends a message to the nation that we need renewables. The environmental cost of pumping carbon dioxide into the atmosphere must be part of the discussion.

There are of course, a number of other factors influencing the difference between 28% and 0.4%. Essentially there are three main challenges.

  1. Our market structure teamed with powerful lobbying groups within the fossil fuel industry means we continue to hand out subsidies to polluters.
  2. The patchwork of wildly different state regulations creates confusion and added costs for both installer and home owner.
  3. A lack of public awareness about Solar- we are all familiar with the huge amount of time and money that needs to be spent on getting customers interested in solar in the first place.

As members of the solar industry, understanding these challenges and also understanding our individual roles within the wider energy market, is vital to our success. You might be looking at ways to reduce soft costs. You might be thinking about how to solve the problems of storage management. You might be interested in demand management. Whatever your role, understanding the way the market is changing is important.

As was the case with Germany, policy change in the US needs to go hand-in-hand with a change in consumer behavior. In the largest solar producing states, such as California, Hawaii, Arizona, New York and Massachusetts, we have seen the first signs that Solar is having an impact on the energy market at this grass-roots level. In these states we have seen a slowing of demand for energy and in some cases even a decrease in demand. Everyday Americans are beginning to use distributed generation; generating energy at the point of consumption instead of from a centralized point. This speaks volumes about where we are as a nation. We are nowhere near where we need to be, but we are changing.

With so much money on the line, even fossil fuel companies realize that this change is in the wind. A famous quote by Upton Sinclair states that “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” This is the essence of our main obstacle right now.

If the cost of conventional electricity were to include the true cost to the environment, it would be a no-brainer for people to switch to solar. If carbon pricing was introduced and the cost of operating a coal fire plant tripled overnight, people would make rational economic decisions and invest instead in renewable energy plants. Ultimately, sending pricing signals to the market is the best way for the USA to change behavior and catch up to countries like Germany.

Do you agree?  Leave your comment below and we’ll respond.

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