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The Cold Hard Truth About Solar Energy

Kent Moors, Money Morning
Germany’s “green energy surcharge” applied to electricity bills across the nation is moving up rapidly. This will translate into on average a 200 euro ($260) per year additional expense for each household on their energy bills. 
Not long ago, I wrote about the German drive to replace nuclear energy with solar and wind power.

At the time, Berlin was touting this overture as the “next great push” into a new energy age.

Turns out, plans haven’t gone as expected.

This winter has provided a good example of how things can go wrong. Solar has a major drawback in that all panels shut off at the same time. That requires massive reliance on other sources of energy.

Despite its avowed decision to relinquish nuclear power, Germany must now import nuclear-generated power from neighboring countries and resort to coal, despite an earlier move to the contrary, in the face of the highest energy costs in Europe. The government is even opening taboo fuel oil generators to make up the power slack.

A move against fracking has prevented the development of domestic unconventional gas, leaving the country dependent once again on importing volume, primarily from Russia. What had begun as a bold experiment in rebalancing energy sources has resulted in a developing pricing crisis.

The cost of German energy needs has begun stifling economic development. That is likely to become a more pressing issue moving forward. The solar energy industry in the country has been the recipient of massive subsidies, including what is known in the American market as “renewable energy portfolio standards.”

These “standards” require utilities and distributors to purchase a certain percentage of their power from more expensive renewable energy sources, passing those added costs on to already besieged consumers.

Rates are now projected to go up as much as 60% in the wake of the nuclear shutdown.

And the problems for end users and renewable energy sources are going to get worse. 

A Record Setting Month

December marked the highest month in history for new solar systems connecting to the grid. The subsidies for adopting renewables expired at the end of the year and additional units are now expected to await a new round of government assistance.

But those making it by the deadline are eligible for subsidies over the next 20 years.

That ensures a continued bite out of taxpayer revenues for what will remain a more expensive method to generate electricity.

Unfortunately, cost increases hardly end there.

The so-called “green energy surcharge” applied to electricity bills across the nation will be moving up…again.

This will translate into on average a 200 euro ($260) per year additional expense for each household, after calculating an increasingly expensive energy bill.

This has led one of the leading German national think tanks to label the solar energy push “the most expensive mistake in German environmental policy.”

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