While Germany Is Headed for 80% Renewable Energy, We're Getting Left in the Dust
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Germany gets unfairly tarred as doing this as a command-and-control program — the energy transformation — according to its critics, mostly in the United States, say it’s a socialist program, and nothing could be further from the truth. It is incredibly market-based, far more than our energy policies, to the extent that we actually have any.
Everybody in Germany has a chance to participate; they can become a utility essentially. If you want to put solar panels on your roof, or if you’re a renter and want to get together with a group of friends and invest in solar panels or a windmill or a windfarm or chuches ... I saw many churches in Germany covered in solar panels and found out they’ve lowered their electricity bills by a huge extent by taking part in this. Giving everyone the financial incentive in making this work is really key.
TL: It seems like such a big transformation in 12 years to go from big power corporations to so much smaller, more distributed, community-run energy sources.
OGD: Yeah and that is key, that it’s distributed rather than centralized. It’s disappointing in the United States that we don’t really have that conversation at all. It’s just assumed here that energy, whether it’s fossil fuel, nuclear or renewable, is going to be produced by a large utility.
In Germany, the large utilities — the Big Four, they’re called — they have about 6 percent renewable energy capacity. But that is by design. When the Renewable Energy Act was written and then passed in 2000, one of the keys was understanding that you have to give everybody an incentive. Even though Germans, to a greater extent than Americans, know that global warming is a huge problem and that it needs to be solved, that isn’t enough to make an energy transformation.
A lot of people here who understand it and know that climate change is a problem can’t really do much about it because even if they put solar panels up — what is that going to do — it’s one tiny piece of something. In Germany they know that they’re plugging into a much larger movement that is going to have an effect and beside from that, you do get a financial benefit; you earn money by putting solar panels on the roof.
To install a similar sized array on a rooftop in Germany costs half as much as it does in the States even though the hardware costs are all the same. It’s the process of putting it up that’s much cheaper — the soft costs. And then you earn money. As opposed to here, where the best you can do with net metering is lower your utility bill to zero. But there, beyond that, you can actually make some coin off of it. Anybody can.
TL: It must help if you’re making investments of tens of thousands of dollars that the overall political will is there and it’s not going to shift every time there is an election.
OGD: Exactly. And that’s another part of the policy design from the Renewable Energy Act that you’re guaranteed a certain price for the power you produce for 20 years. So businesses, including individuals, know exactly how long it will take them to recoup the costs and start earning money on it — and how much they’ll make for the next 20 years. A lot of small businesses are doing this because there is policy certainty. In the U.S. we’ve just seen here with the Wind Production Tax Credit, the fact that it’s going to expire here on December 31st unless Congress extends it, wind manufacturers have already laid off several hundred people in the United States because of that policy uncertainty.