Introduction

The idea of using the power of the sun for heating and lighting was intuitive. Passive solar energy has been used as a form of light and heat since early humankind. In the 5th century B.C., the ancient Greeks designed their homes to capture the sun’s heat during the winter. Later, the Romans improved on solar architecture by covering south-facing windows with clear materials such as mica or glass, preventing the escape of solar heat captured during the day. In the 1760s, the Swiss scientist Horace de Saussure built an insulated rectangular box with a glass cover that became the prototype for solar collectors used to heat water1.

Why GermanyExploring the German experience through years in using the Solar Power energy and what are the important policies that shaped this renewable market. It is well-known that German nowadays has by far the highest capacity of solar photovoltaic power (PV) (1st in capacity as of end 20132) Choosing Germany as a case study will allow this research to have a wide explore on the solar power industry. Solar energy industry in Germany considered one of the biggest industries considering Germany one of the most aggressive supporters and leaders of renewable energy rights. In addition to the number of people working in the solar energy industry; which is approximately 371,0003. In Germany, more than 1.3 million solar power plants generated almost equivalent to 5.3% of German electricity consumption (Burger, 2014), and total capacity was rated at 36 GW at the end of 2013.

As a huge solar electricity products they also have amazing subsidizing framework to compete, along with a well-developed feed-in tariff scheme, all solar systems can send excess electricity to the national grid for profit, they were one of the first countries to take on the feed-in tariff. Germany has a competent workforce in the industry and outstanding facilities for research and development. Also, the superb know-how on machinery and technology in general make many German businesses international leaders in the solar industry. (Modee 2011.)

Please check live update of power generated in Germany from the following site: http://www.sma.de/en/company/pv-electricity-produced-in-germany.html

1 EERE Energy report https://www1.eere.energy.gov/solar/pdfs/solar_timeline.pdf2 REN21. 2014. Renewables 2014 Global Status Report3 IRENA Presentation by Rabia Ferroukhi 29 October 2014

Solar History in Germany

1972 Oil crisis1974 Federal environment agency founded.1992 the Fraunhofer institute of solar energy built an off-grid solar home as concept house.1998 Liberalization of Germany power market “the power company & the grid operators has to be separate entity. This means all new power providers can enter the market selling renewable energy only.1999 market incentive program & multimillion financial support program launched.1999-2003 eco-tax policy “charge an additional tax on gasoline & electricity bills to support renewable program.2000 the Renewable Energy Act (EEG) (pay linked to the cost of investment) replaces the feed-in (pay linked to electricity retail price)2000 Germany reached agreement with nuclear plants owners to gradually phase out the nuclear plants by 2022.2001 European court of justice announced that feed-in-tarriff is legal practice. 2002 the German Energy Saving Ordinance (EnEV) has been in force & amended in 2007. (reducing energy consumption in buildings).2004 photovoltaic approved in the EEG.2005 Kyoto protocol forced2007 new policies & support scheme for renewable energy announced to integrate energy & climate programs.2009 eco-design energy products adoption.2010 extension given for Germany remaining 17 nuclear plants to operate for an additional 8-14 years.2011 Fukushima nuclear accident made Germany to reconsider shutting down their nuclear plants in 8-14 years & cause them to act quickly & shut 8 of the plants within 2 weeks & to shut the last plant by 2022.2012 Germany sets new record for energy generated from solar.2013 Germany renewable energy surcharge increased to 5.3 cents per kWh & the power export increases by around 50%.2014 renewable surcharge increased to 6.3 Cents per kWh.2020 PLAN to have 50GW of PV power connected to FIT (10% of the demand).

Problem:Germany's demand for energy is met by imports of up to 74%.4 the country base load power demand getting higher every year, and retail electricity rates are high and rising, putting pressure on lower income individuals in particular, 1973 Oil crisis and energy crisis 1979 pushed to find alternative sources for energy. The relatively high prices of solar energy systems, causes financial challenges for the manufacturers and governments regulations and rules of the FiT. Due to some cutbacks in the government subsidies, companies with low energy capacity are struggling to survive.

4 BMWA, Energy Data, August 2005

PeopleThe German sustainable electricity started during the oil crisis in 1973 demonstrating dependence on energy imports (Pulczynski, 1991), Moreover several survey during the 90s that conclude at 57% of people >30 years old believe in alternative power solution and it will affect the future on Energy. Future support for renewable energies is widely accepted—49% think support should continue at current levels, 47% think it should be increased, and only 14% think that subsidies should be reduced5. Following up on the public opinion the government of Germany start promoting alternative energy structures it electricity sector and start promoting the new policies to attract more support for renewable energy by introducing the system of FiT in 1991 and amendment of 2004

5 (BPA) Federal Public Relations Office), 2003

PolicyThe rapid growth in solar energy is due to proactive policies, and applying the FiT, which made a massive change in considering solar power as an expensive source of energy. PV power plant operators receive a fixed feed-in-tariff6 for a period of 20 years; whereas by the end of this period Solar power will be less that other source whereas its has low operating cost with no fuel costs. On the other hand, Fossil fuel and nuclear power must continue using purchase fuel and dispose of the waste produced from burning this fuel in order to generate electricity even after the investment.The purpose of the feed-in tariff is to give investors a reasonable return on investment.. Feed-in tariffs are a comprehensive renewable energy policy responsible for two-thirds of the world’s wind power (64 percent) and almost 90 percent of the world’s solar power. With simplified grid connections, long-term contracts and attractive prices for development, that’s policy that works.

Germany Solar Market

6 Under certain conditions

POLITICSIn the beginning of the 90’s the German government started heavily supporting solar technology. They began to subsidize households for putting up solar panels on their rooftops. The government introduced a feed-in tariff for electricity production as a part of their sustainable energy policy. This was very expensive for the government but was vital in getting the investors and businesses interested in renewable energy and with that the whole industry to life. (Roland Berger Strategy Consultants GmbH 2011, 58.)

ECONOMICSGermany has the fifth largest economy in the world with its GDP of $3.25 trillion (CIA 2013). Germany doesn’t have that much raw materials. The country imports most of its resources. Yet, Germany has long been one of the leading countries in exporting, technology and manufacturing. (Princeton.)

SOCIO-CULTURALWith over 81 million people, the German people have good welfare and education system. (CIA 2013.) The key values in German business culture are efficiency, quality, preciseness, punctuality and formality, just to mention a few. Business is not something to joke about, the Germans react to it very seriously

TECHNOLOGICALGermany is known for its technological innovations, research, development, and Nobel Prize winners. Globally known companies include Mercedes-Benz, Siemens and Bosch. Many of the German universities among the Max Planck Society represent the cutting edge of research and development in Europe. Germany is one of the leading countries in producing clean energy technologies. It is estimated that the market of clean energy will grow to €300 billion by 2020 (Roland Berger Strategy Consultants GmbH 2011, 101.)

ChallengesGermany is as from above generating around 20% or its electricity from renewable energy and there were lot of researches relates challenges in the development and operation of Solar power systems some of those are in the below main categories: 1. Permitting Procedures o Presence of restrictions on the lando Environmental impact assessment requirementso Regional regulations 2. Grid-related o Grid connection costso Grid accesso Long waiting times 3. Support-related o Complex and long procedureso Market capso Regulatory uncertainty 4. Operation & Maintenance

o Unforeseen costs or diminished revenueso Administrative requirementso its carbon emissions rose by 1.8pc 2013

In addition to the above mentioned factors Germany also wll have defernet kind of challenges because of their political regulation such as:

on 30 May 2011, after increasing pressure from anti-nuclear federal states, the government decided to revive the previous government's phase-out plan and close all reactors by 2022. The cost of attempting to replace nuclear power with renewables is estimated by the government to amount to some EUR 1 trillion without any assurance of a reliable outcome, and with increasing reliance on coat7.

“The environment minister says the cost will be one trillion euros (~$1.35 trillion) over the next two decades if the program is not radically scaled back8.”In addition to all above it’s the Wrong place, wrong tech to start the green revolution,

Another major problem with Wind & Solar is the balancing of electricity on the grid when wind stops blowing and the sun goes down.

7 World Nuclear Association, august, 20148 Ryan Carlyle, BSChE, Subsea Hydraulics

Figure 1Solar PV Global Capacity, Shares of Top 10 Countries, 20129

Health

Jobs

Lessons Learn

Germany is somehow was successful in meeting some of the stated goals of its renewable energy policy: mainly climate change mitigation, energy independence, reduction of fuel costs, conservation of fossil fuels, CO2 emission reduction, local economic development, and expansion of the domestic manufacturing base.

Feed-in-Tariff: As from our above argument we notice that Germany leads the world in solar in many respects. Had more solar power per capita than any other country, More solar power relative to electricity production and more solar power per GDP. Clearly, Germany with its policies their own FiTs had a solar power growth than others. FiTs have been used for the installation most solar power in the world (Farrell,2011).

Source: Institute for Local Self-Reliance (ILSR), via CleanTechnica

9 http://www.ren21.net/portals/0/documents/resources/gsr/2013/gsr2013_lowres.pdf

Mature Solar Market: the massive investments on Solar energy, made the prices of solar per watt decreases heavily, enabling this sources of renewable energy to be available to the rest of the world. People, who are selling their electricity to the grid, go through a bidding process, who sell’s their electricity to the grid for cheapest win.

Democratizing the grid: residents are motivated about energy, save more and involved in policies and energy cost. With energy being a critical component of life, and As Germany as one of the richest industry in the world, having a citizenry that is highly informed about the intricacies of energy is a very valuable commodity. A recent International Energy Agency report released on January 29, 2014, stated that the EU is expected to lose one-third of its global market share of energy intensive exports during the next two decades due to high energy prices, the majority of which is due to the high cost of energy imports, such as gas and oil.10

Solar Energy from cloudy place: Germany located in one of the cloudy places with less sunny days, and still Germany succeeded to generate one of the world highest solar energy productions.

Jobs and Employment : Most of the growth occurred in the solar energy sector, which went from about 25,000 jobs in 2004 to nearly 120,000 in 2010. Germany is Europe’s leading PV manufacturer and is the largest manufacturer of inverters in the world.

CO2 Emission reduction:

Market Control: German incentives played a great role in the development of solar power generation. However, these incentives can cause deficits in power markets, where this should be offset with government subsidies or increases in the price of electricity.

10 Financial Times, “Energy price gap with the US to hurt Europe for ‘at least 20 years”, 29 January 2014.http://www.ft.com/cms/s/0/80950dfe-8901-11e3-9f48-00144feab7de.html#axzz2thyHzZc8

Summary

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