Germany has positioned itself as a world leader in solar energy, with a boom in installations over the past several years due to generous state subsidies and low cost panels imported from China. Solar power was has formed the backbone of Germany's renewable energy revolution which in which Germany wants to produce 80 percent of its energy from renewable sources by 2050.
It may then seem a bit of surprise to know that Peter Altmaier, the environment minister in Angela Merkel's Democratic government, has just announced that by 2018 at the latest, all solar subsidies will be stopped.
For a while now Altmaier has fought to secure a solar capacity ceiling above which the government would no longer provide the subsidies that have fuelled development. On Monday he announced that a capacity limit of 52GW had been set, and that they expected to reach this limit by 2018 at the very latest; currently Germany boasts 34GW of solar power capacity.
Altmaier did not support a continuation of the subsidies, because "the development of solar energy ran out of control in the last three years."
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The problem was that the subsidies offered energy producers a generous, guaranteed price for the electricity they generated from solar panels. The farming sector took advantage by installing solar arrays on their land and then using the subsidies as a supplement to their primary income. The government found itself spending huge amounts on solar subsidies when in reality, solar was not the most reliable form of renewable energy available (as the sun does not always shine).
Peter Loescher, the head of Siemens, stated that Berlin "has so far invested 216 billion euros ($278 billion) in renewables and the biggest chunk went to solar, the technology which does least to ensure the power supply."
Recently German manufacturers have begun to file for insolvency as overcapacity and strong competition from China has squeezed their sales. Germany's once thriving industry really seems to be coming to an end.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More