Germany’s Solar Cell Promotion: An Unfolding Disaster
This article revisits an analysis by Frondel, Ritter and Schmidt (2008) of Germany’s Renewable Energy Act, which legislates a system of feed-in tariff s to promote the use of renewable energies. As in the original article, we argue that Germany’s support scheme subsidizes renewable energy technologies not based on their long-term market potential, but rather on their relative lack of competitiveness, with the photovoltaics (PV) technology enjoying high feed-in tariffs, currently over double those of onshore wind. The result is explosive costs with little to show for either environmental or employment benefits. Indeed, we document that the immense costs foreseen by Frondel and colleagues have materialized: Our updated estimate of the subsidies for PV, at 100 Bn €, exceeds their expectations by about 60%. Moreover, with installed PV capacities growing at a rapid rate, these costs will continue to accumulate, diverting resources from more cost-effective climate protection instruments.
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- Grösche, Peter & Schröder, Carsten, 2011.
"Eliciting public support for greening the electricity mix using random parameter techniques,"
Elsevier, vol. 33(2), pages 363-370, March.
- Peter Grösche & Carsten Schröder, 2010. "Eliciting Public Support for Greening the Electricity Mix Using Random Parameter Techniques," Ruhr Economic Papers 0233, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Grösche, Peter & Schröder, Carsten, 2010. "Elicting public support for greening the electricity mix using random parameter techniques," Economics Working Papers 2010,02, Christian-Albrechts-University of Kiel, Department of Economics.
- Manuel Frondel & Nolan Ritter & Christoph M. Schmidt & Colin Vance, 2009.
"Economic Impacts from the Promotion of Renewable Energy Technologies - The German Experience,"
Ruhr Economic Papers
0156, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Frondel, Manuel & Ritter, Nolan & Schmidt, Christoph M. & Vance, Colin, 2010. "Economic impacts from the promotion of renewable energy technologies: The German experience," Energy Policy, Elsevier, vol. 38(8), pages 4048-4056, August.
- Johann Wackerbauer & Jana Lippelt, 2012. "Photovoltaics: Boom of the Rising Sun," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 13(1), pages 70-73, 04.
- Lehmann, Paul & Gawel, Erik, 2013.
"Why should support schemes for renewable electricity complement the EU emissions trading scheme?,"
Elsevier, vol. 52(C), pages 597-607.
- Lehmann, Paul & Gawel, Erik, 2011. "Why should support schemes for renewable electricity complement the EU emissions trading scheme?," UFZ Discussion Papers 5/2011, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
- Manuel Frondel & Rainer Kambeck & Christoph M. Schmidt, 2006.
"Hard Coal Subsidies: A Never-Ending Story?,"
RWI Discussion Papers
0053, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
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