News and analysis about energy in California with an eye toward renewables.

Germany Widens Global Solar Lead

Typical new housing construction in Germany | Photo: Tim Fuller/Flickr/Creative Commons License

Germany continues to outstrip the rest of the world in solar power capacity, and is adding new solar faster than any other country as well. According to the trade publication Solarserver, Germany Trade and Invest (GTAI), the nation's economic development agency, says that Germans installed 320 megawatts of photovoltaic (PV) capacity in August 2012, putting the nation's overall PV capacity above 30 gigawatts -- roughly 24 times California's current total solar capacity.

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According to GTAI's recent report The Photovoltaic Market in Germany, the country installed nearly 7.5 gigawatts of photovoltaic capacity in 2011 alone, more than 3 gigawatts above the U.S.'s total PV capacity at the end of 2011.

Germany's only global competitor in PV capacity is Italy, with about half Germany's capacity installed by the end of 2011. Both Germany and Italy rely on robust feed-in tariffs to promote PV development; under a feed-in tariff arrangement, owners of small PV installations are paid a premium amount for any power they "feed in" to the grid.

Due to the success of its feed-in tariff, Germany's solar infrastructure boom has brought installation costs low enough that for the last year it's actually been cheaper to power your home entirely with your own solar panels than it is to buy power from the grid -- even counting feed-in tariff payments.

While the German and Italian solar sectors are gaining steam, California -- with an economy roughly the size of Italy's -- is making gains in PV capacity that are only modest by comparison, and lackluster incentives are the main reason. Last week San Diego Gas & Electric's rooftop solar incentive payments through the California Solar Initiative (CSI) fell to 20¢ per installed watt, from a high of $2.50 when the CSI began in 2006. The CSI calls for incentive levels that decline over time as the program approaches a target of just under 2 gigawatts of installed PV.

Germany's 2011 PV capacity ranked against everyone else's. Graph courtesy GTAI

Germany's feed-in tariff, now set at about 25¢ per kilowatt hour, is also planned to decline as the European economic powerhouse approaches a solar target -- of 54 gigawatts of installed capacity. GTAI expects the country will meet that target in the next three years, at which point PV will provide a tenth of the country's power.

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About the Author

Chris Clarke is a natural history writer and environmental journalist currently at work on a book about the Joshua tree. He lives in Joshua Tree.
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California doesn't need incentives for solar power with the possible exception of a low interest loan scheme, it needs instead to learn lessons from Germany and other European countries on how to eliminate unnecessary soft costs, and how to standardise installation regulations across the state, and ideally right across the USA and Canada.

Average German installed cost for solar arrays are $2.24 per watt whilst in the UK even domestic arrays of less than 4 kW average around $3.2 per watt. (Large UK commercial arrays can cost as little as $1.7 per watt installed). This is I believe around half the price in California. These prices continue to drop.

What is the difference? Soft costs.

In Germany and the UK, most homes do not require planning permission to install a solar array, the right to connect to the grid is more or less automatic with some limitations, and accredited installers are not considered to need routine inspection of their work. Even commercial installations can in some cases be installed within a few weeks of agreement. (First install and spot checks are carried out, but not every array).

The result - no fees for planning, no fees for grid connection, no fees for inspection, and the ability to install very quickly following first enquiry. (I bought a house in the UK on 10th March 2012 and had a solar array fitted on 27th March 2012 though I did have the survey done in February).

All of the above greatly reduces installation costs, and reduces the time for which proposed arrays stay in the pipeline before installation greatly improving cash flow. All these improvements together form a virtuous circle driving volume, and further reducing costs.