How a Country With One of the World's Largest Economies Is Ditching Fossil Fuels

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Buying Public Buy-In

Another component of the Energiewende is an incentive-based system that’s referred to as a “feed-in tariff”.  Germans who install renewable energy systems (envision solar panels on your house) can sell surplus power back into the power grid at a rate guaranteed for 20 years.  The feed-in tariff rate has dropped significantly over the past few years as more and more individuals, small businesses, and pop-up entrepreneurs take advantage of the financial incentives, costing the German government increasing sums.  According to a 2012 Economist article, “The number of ‘energy co-operatives’ has risen six fold since 2007, to 586 last year. Solar parks have migrated from farms and family houses to apartment blocks. ‘Roof exchanges’ match owners with investors.” 

This tariff both engages the German public in the great “transition”, while creating a more decentralized system of energy production and increasing the independence of Germany on foreign energy sources. Importantly, Germans are making this transition through clean, renewable energy, as opposed to the U.S. energy independence scheme currently centered around dirty fossil fuels.

In the U.S., we have incentivized small-scale renewables and energy efficiency with federal tax credits for energy efficiency since 2006, which include tax credits for up to 30% of the cost of renewable energy and other energy efficiency measures for individuals.  What we’ve seen in the U.S. over the past 12 years is less of an emphasis on climate or energy regulation at the federal level, with concerned states and municipalities picking up the slack. According to the Data of State Incentives for Renewable and Efficiency (DSIRE), there are only a small handful of federal rules, regulations, or policies for renewable energy in the U.S., compared to over 380 of them at the state and local level.  So, what’s preventing our national government from joining the renewable revolution?

Energy History

In Germany, no one is arguing one thing: energy prices are going to go up, before they go down.  In the U.S., where “tax” is a four-letter word and prices at the gas pump influence elections, rising energy bills are a politician’s nightmare.  In Germany, however, it is expected that Chancellor Angela Merkel, who spearheaded the dramatic pace of the Energiewende, is projected to easily win re-election.  Why then, despite the grumbling of many from the consumer and business side on price escalations, are Germans taking the renewable energy lead?

Part of the story has to do with German history and the domestic relationship with energy.  For many in Berlin, the radioactive fallout of the 1986 Chernobyl nuclear disaster in what is now the Ukraine, still stings.  Many remember it as a time where German children weren’t allowed to play in the streets for fear of contamination and water supplies were suspect by a majority in the region.  The 2011 Fukishima nuclear disaster of Japan was a sudden tipping point for Chancellor Merkel and many Germans. Although Germany was already planning a national energy overhaul, the rapidity of the national nuclear phase-out was drastically increased following Fukishima. The images and tremendous impacts of this disaster nailed the lid on the coffin of German nuclear power. 

Often slated for its “clean” energy in terms of greenhouse gas emissions, nuclear is hotly contested throughout the world due to the danger of necessary radioactive material and the lack of safe disposal methods for toxic waste. However, some questions also arise with the sudden phase-out of nuclear energy in Germany, including: What will Germany do with the waste from its current nuclear facilities? Can Germany really claim nuclear safety on a domestic level when its neighbor, France, is dependent on over 75% of its domestic energy by nuclear power?  And what about the increased domestic emissions from new coal power plants being built to counter the energy production lost by the phase-out of nuclear?