GUESS the country. It has over half the world鈥檚 installed capacity of photovoltaic cells and is home to some of the largest solar cell manufacturers. In short, it is the solar-power capital of the world. Yet it is not in the sun-drenched tropics nor even bordering the Mediterranean. The country is Germany.
How did this happen? Granted, Germany is a technological powerhouse and has contributed substantially to improving the efficiency of solar cells, but that鈥檚 only part of the story. The real secret is political intervention. In 2004, borrowing a Japanese idea, the German government introduced the first large-scale 鈥渇eed-in鈥� tariff system. This assures all producers of solar-generated electricity, whether giant solar farm or home-owner, that they can sell excess power back to the grid at a premium which is guaranteed until 2024.
This single incentive did more than anything else to kick-start Germany鈥檚 solar industry and propel the country to its world-leading position. Suddenly, solar electricity made economic sense to consumers. As demand grew, so did manufacturing output. In just two years, Germany鈥檚 installed capacity nearly doubled and about 300,000 small businesses and individuals set up photovoltaic systems on their roofs. Germany now has 3 gigawatts of solar capacity, equivalent to the output of at least three large fossil-fuelled power stations.
Advertisement
Following in Germany鈥檚 footsteps, some 20 countries 鈥� and California 鈥� have implemented feed-in tariffs. Those countries lagging behind, which include the UK and Australia, are missing not only an opportunity to improve the environment but also a commercial opening. If proof were needed that green technology can be a money-spinner, Germany provides it.
Technology still has more to offer (see 鈥淗ere comes the sun鈥�), but for the next few years technology alone will not be enough because solar cells are still expensive. Germany has shown that with carefully targeted pump-priming money, it can stimulate industrial growth and vanquish the cost bogeyman. The rule seems to be that the cost of photovoltaic cells falls by one-fifth every time manufacturing capacity doubles. With the price of oil high, the price of fossil-fuel power destined to rise as Europe鈥檚 carbon-trading scheme starts to bite, and as demand for solar power inevitably rises, Germany is well set for a bright solar future. This sort of bold, creative thinking is just what the world needs if it is to beat climate change.
Energy and Fuels 鈥� Learn more about the looming energy crisis in our comprehensive special report.
