Germany Cuts Subsidies to Floundering Solar Industry

By:  James Heiser
03/22/2012
       
Germany Cuts Subsidies to Floundering Solar Industry

Germany — once a global leader in the race for reliance on “alternative” forms of energy — has discovered that no amount of environmentalist ideology can alter the fundamental laws of economics. Although wind and solar “farms” have been the recipients of lavish government subsidies throughout the European Union, the German government is now being forced to concede it cannot continue supporting solar power at the levels that had quickly become customary, and is dramatically reducing its solar energy subsidy.

Germany — once a global leader in the race for reliance on “alternative” forms of energy — has discovered that no amount of environmentalist ideology can alter the fundamental laws of economics. Although wind and solar “farms” have been the recipients of lavish government subsidies throughout the European Union, the German government is now being forced to concede it cannot continue supporting solar power at the levels that had quickly become customary, and is dramatically reducing its solar energy subsidy.

A Washington Post story by Michael Birnbaum and Anthony Faiola (“Solar industry faces subsidy cuts in Europe”) evaluates the decision made by the German government that will drastically reduce the subsidies that have given solar power the appearance of profitability in that nation:

German policymakers indicated last week that they planned to cut once-generous subsidies as much as 29 percent by the end of the month, on top of a 15 percent cut in January, although some details were still being negotiated after protests from the solar industry. Britain and Italy have made similar moves, and in January, Spain abandoned its subsidies altogether, prompting outrage from the solar industry.

It is hardly surprising that such reductions in subsidies would lead to “protests” and “outrage” from the solar industry; an earlier Washington Post article by Faiola in November 2009 took note of the fact that even with subsidies in place, average German families had a hard time adopting solar on a household level since they “can't afford the initial cost, which runs between $8,000 to $20,000 even after generous government rebates. Instead, they must depend on Germany's general grid, which now serves up some of the most expensive electricity in the world.”

Click here to read the entire article.

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