Checking in with what’s been happening in Germany, eugyppius explains why solar power is far from the cost-free energy source that politicians and scam artists try to claim:
Photovoltaic panels on a roof, 28 April, 2015.
Photo by Antonio Chaves, via Wikimedia Commons.
Climatism in Germany is attended by all manner of naive ideas and bright pink fairytale slogans. Among the latter is a dubious proverb proclaiming that “The sun doesn’t send any bills” (in German: “Die Sonne schickt keine Rechnung“). Such proverbs always seem initially plausible (is there anything freer and more democratic than sunshine?) while proving to be basically the opposite of the truth. In fact, the energy transition has landed German taxpayers in the position of paying billions of Euros for the sun to shine. It is becoming an unmitigated disaster, and what is worse, the more we expand solar capacity, the more we will have to pay. For something that does not send any bills, sunshine has sure become very expensive here in the Federal Republic.
Welt calls it “the solar trap,” and it works like this: Our Renewable Energy Sources Act (EEG) pledges to pay renewables producers fixed tariffs for every kilowatt hour of electricity their installations feed into the grid. Whether you are an ordinary climate-conscious person with solar panels on your house or you run massive solar farms, the EEG entitles you to receive these fixed “feed-in tariffs” for a period of twenty years. The EEG also requires grid operators to accept your electricity regardless of demand and to sell it on the electricity exchange.
Now the sun, although it may not charge for its services, turns out to have this naughty habit of shining in many places all at once. When this happens, electricity supply often exceeds electricity demand and exchange prices fall. They can fall all the way to zero, or in extreme situations of excessive sunshine they can even go negative. Negative prices mean that you have to actually pay “buyers” to take the excess power off your hands. Whether the prices are merely very low, or zero, or negative, the German taxpayer has obligated himself, via the EEG, to pay these producers of unwanted if extremely green and climate-friendly electricity their fixed feed-in tariffs anyway. That is, we are on the hook for the difference between the actual exchange value of excess electricity and the feed-in tariffs promised to producers. In this way we have ended up literally paying for the sun to shine.
In September alone, Germany paid 2.6 billion Euro to renewables producers for electricity that had a market value of a mere 145 million Euro. Our sunny autumn is destroying our already-fragile government budget. Federal number-crunchers had originally allocated 10.6 billion Euros for feed-in tariffs in 2024, but already the government owes 15 billion and the year is not yet over. Scholz’s cabinet are thus trying to allocate an additional 8.8 billion Euro for the rest of the year. The parliament have yet to approve the additional funds, though, and also the damned sun will just not stop fucking shining, and so probably even this supplementary allocation won’t be enough. We’re bleeding money, all for a sun that doesn’t send any bills.
This problem will get worse before it gets better. The more solar panels we install, the greater oversupply we’ll face when the sun shines, and the larger the spread between the fixed feed-in tariffs and the actual market value of this green electricity. In 2024, as I said, the government projected that feed-in tariffs would cost 10.6 billion Euros, but they’ll probably end up costing 20 billion at least. Next year, the costs are projected to be even higher, and the year after that, they will be higher still. As Welt report, the German government plans to triple our solar capacity to 215 gigawatts over the next six years – “the equivalent of 215 nuclear power plants” every time the sun emerges from behind a blessed cloud.
The energy transitioners know they messed up. The new plan is to change the rules for solar subsidies. When prices go negative, larger producers won’t receive their fixed tariffs, and they’ll also have to sell their electricity themselves. In this way, they will become newly sensitive to market demand and stop overproducing electricity when nobody wants it. It is almost like creating a blind system totally oblivious to market incentives was a bad idea. Unfortunately, the new rules will apply only to new solar installations. The German government will still have to honour its insane agreement to pay the operators of older solar plants for years to come. We will light billions on fire for nothing.
