The average day in Germany is cloudy. In fact, Germans see an average of just over 1500 hours of sunshine per year, a bit less than 64 days worth of sunlight. Needless to say, Germany would be one of the last countries you’d expect to be the overwhelming leader in solar energy production. Yet here it is. Germany alone has half of the world’s solar installations and is the third-largest producer of solar cells. Q-Cells, a German company, recently pulled ahead of Sharp as the world’s largest maker of photovoltaic cells. So how did they do it? How could a dreary country like Germany singlehandedly conquer the solar industry?
To find out, one need look no further than the German government’s aggressive renewable energy incentives. In 2000 the Renewable Energy Sources Act was passed, requiring the country’s utility companies to purchase electricity from solar start-ups at rates higher than retail value. Commonly known as feed-in tariffs, these subsidies made it easy for new solar companies to turn a profit. In fact, their profits were pretty much locked in, and companies raced to get started. That’s how in just four years Germany was already responsible for half of solar electricity generated worldwide.
Now, eight years later the country is still going strong. The progressive law is a broad measure attempting to reduce carbon emissions. The goal is to derive a quarter of its power from renewable sources by 2020. They are already ahead of the 12.5%-by-2010 benchmark set by the European Union. Germany already stands tall with 14.2% of its electricity coming from renewable sources.
And the effect of Germany’s solar leadership has resonated globally. Spain, France, Italy, and Greece have installed similar incentive plans. And U.S. states, led by California, have instituted German-inspired incentives such as net metering.