Why Germany should aim for 200GW of solar

Matthew Wright

German energy experts and the renewable energy industry are now calling for a national target of 200GW of solar power by 2030.

And Germans know how to meet a challenge. They set a target of generating 20% of the nation’s electricity from renewable sources and got there 10 years ahead of schedule in 2010. And rooftop solar, still in its infancy, came from nowhere and will power more than 4% of Germany’s electricity needs this year.

Speaking at the “2nd inverter and PV System Technology Forum 2012,” in Berlin, German renewable energy expert Professor Volker Quaschning, of the University of Applied Sciences, was met with applause when he suggested that Germany could meet a target of 100GW of rooftop solar by 2020 and 200GW of solar by 2030.

Professor Quaschning also suggested that the super successful German Feed-in-Tariff legislation, which that has got rooftop solar down the cost curve to below 20 Euro cents, can be removed in just three to four years from today, up to two years ahead of the original 2017 schedule.

A 200GW solar PV target would require about one billion individual solar panels. When asked where they would put all the panels, Professor Volker Quaschning said there is enough physical usable space on rooftops for ten times the current installed base of panels in Germany.

What Professor Quashning is highlighting is that Feed-in-Tariffs have been a very successful cost reduction and deployment mechanism which has succeeded in developing a technology that can stand on its own feet competing against metered, dirty fossil fuel electricity in the world’s retail energy markets.

The proposed 200GW target (when taking into consideration Germany’s legislated Energy Efficiency target) would see a bit over a third of Germany’s electricity coming from Solar Photovoltaic.

Analysts in Australia constantly fail to understand the motivations of the German Feed-in-Tariff and make some serious mistakes when judging it. The most well known mistake has been the gross misinterpretation of the German Feed-in-Tariff support scheme by boffins at the Productivity Commission, who have not understood the goals and aims for the German Feed in Law (EEG).

Today 25GW of PV has been supported through the Feed-in-Tariff. This will rise to 40GW by 2015/16 at which point the subsidy will be removed.

From the end of the support period in a few years, Germany will see 160GW of rooftop solar added unsubsidised. When a subsidy is not required the reduction in carbon emissions is called abatement at a negative cost or negative cost abatement.

As Germany will only have supported one fifth of her total solar capacty by 2030 the cost of the original 2000-2016 support must be shared across the other four fifths of installations to 2030 to get a true picture of the level of support to the technology.

The Productivity Commission claims that the Feed-in-Tariff in Germany has an implied abatement cost of ~$864 a tonne, however a proper consideration of the plan in terms of a 200GW deployment to 2030 with only 40GW of that supported by Feed-in-Tariffs has the abatement cost per tonne of the German FiT at $45 a tonne or lower. (Applying a negative abatement value is difficult to quantify so for the purpose of this argument abatement cost for subsequent unsupported 160GW is assumed at $0)

What is really interesting about the German Feed-in-Tariff (EEG) is if you take into account modest projections that the world will have 10% solar PV by 2030 then the German Feed-in-Tariff has almost single handedly given a cost negative form of abatement for the deployment of 3000GW of rooftop solar to 2030. It is difficult to amortise the cost of the Feed-in-Tariff program over this level of deployment. The cost would either be negative or no higher than $5 a tonne – a bargain by anyone’s measure.

Why is the Productivity Commission bringing blind ideology into their analysis of well thought out and structured effective programs?

Germany has lowered the cost of this technology and turned their economy down. We have achieved neither. Why are SOME Australian organisations and government/quasi-government organisations so opposed to this technology cost reducing strategy?

A possible answer, if you can get through the thick haze of smoke, is that Australian institutions who are giving skewed analysis of the success of overseas programs are being protectionist in their support for the fossil fuel industry rather than considering the well being of the Australian people.

In reports by organisations like or parroting the Productivity Commission, everywhere you turn there is a mention of just how cheap gas is and that is the direction in which we need to shift our energy supply system.

Gas combustion for electricity generation is much more expensive than Solar and other renewables such as wind power. A generation company cannot forward contract all its gas feedstock for the 30 year life of the plant at the prices it is paying today. We do not know what the price of oil and therefore the price of gas will be in 2015 or 2020.

With analysis supporting gas or coal (which are exposed to international price parity) using guesstimates as to what future oil and gas price is going to be, ordinary Australian’s are having their futures gambled with. With Solar and Wind Australian’s are pre-purchasing risk free the plants lifetime fuel on day one, removing the risk of consumers being lumped with the pass through costs of high fossil fuel prices in years to come.

The Productivity Commission must consider the economic impacts of $100, $200 and $300 a barrel oil on fossil gas derived electricity prices when they choose to mislead us ignoring the facts aroun the success of international renewable programs in creating cheap energy and the cheapest carbon abatement.

Ross Garnaut is on record saying that we are “not a piss-ant country”. If that’s the case we will happily do our bit in legislating for renewables, driving volume up and costs down, through private and public investment in process refinement, learning through doing, research and development for even further reductions.

Matthew Wright is Executive Director of climate and energy research organisation Beyond Zero Emissions