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Title:Germany's solar cell promotion: An unfolding disaster PDF Logo
Authors:Frondel, Manuel
Schmidt, Christoph M.
Vance, Colin
Issue Date:2012
Series/Report no.:Ruhr Economic Papers 353
Abstract: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.
Subjects:Energy policy
employment effects
climate protection
JEL:Q28
Q42
Q48
Persistent Identifier of the first edition:doi:10.4419/86788407
ISBN:978-3-86788-407-5
Document Type:Working Paper
Appears in Collections:Ruhr Economic Papers, RWI
Publikationen von Forscherinnen und Forschern des RWI

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