THE GERMAN EXAMPLE: How the United States can Learn from the Rapid Expansion of the German Solar Energy Program

Abstract

Global warming is an undeniable phenomenon that, over the next century, could threaten the social, biological, and geographical systems of our planet. While combating climate change is a daunting task, great progress can be made through transitioning our energy systems from fossil fuels to renewable energy – solar, wind, geothermal, and biomass. Solar is the most abundant of natural resources, and is currently the fastest growing energy source in the world. Its rapid growth has made solar and other renewables economically feasible, as the price for renewable energy continues to plummet. A well implemented transition to renewables will lead to economic growth, cheaper and unlimited energy, and limits on the consequences of climate change. Currently, Germany is leading the world in non-hydro renewable energy consumption through an energy transition it calls the Energiewende. Despite a less than ideal climate for solar, the industry in Germany continues to grow and now accounts for a significant portion of its renewable generation. Germany has made this change through a simple policy framework called a feed-in tariff (FIT), and a grassroots movement for renewables driven by German citizens. The U.S. is also expanding its renewable generation and consumption but, even with a far better climate for solar and wind, remains well behind Germany. A recent push by the Obama administration is gradually moving renewable energy to the forefront in U.S. politics, but there are formidable challenges due to inherent political barriers, lack of advocacy from its citizens and, most importantly, ineffective government policy. In a side-by-side analysis, it is clear that the U.S. can learn a great deal from the German energy revolution, both from its successes and its failures. The U.S. is held back by a highly complex incentive scheme for renewables with tax credits, net metering, renewable portfolio standards, tradable certificates, and more. The U.S. renewables market is further fragmented by differing policies between state and local governments, and a lack of a definitive policy at the federal level. While the German renewable energy program is not without critics, it has an impressive 27.3 percent renewables in the grid, and that number is steadily climbing. But with the unprecedented growth has come challenges, forcing Germany to constantly modify and adapt its renewable energy legislation. The U.S. has the unique opportunity, if not a moral obligation, to learn from this energy revolution in Germany. If it does, while making a true commitment at the highest levels, it can sustain a rapid, stable transition to renewable energy, and lead the world in the fight against climate change.