While other nations hunt for ways to wean themselves from fossil fuels, Germany is in the throes of a green revolution that has made it the global leader in solar- and wind-power generation.
The reason? A pioneering law that requires utilities to buy electricity from renewable sources at premium rates. This means anyone with a rooftop solar generator or a small water turbine can sell the energy they produce at a healthy profit.
“It puts power in the hands of the people,” says Stefan Schurig, energy director for the World Future Council, which promotes sustainability.
Following Germany’s lead, more than three dozen nations, from Spain to Indonesia, have adopted some variation of the policy, known as a feed-in tariff. In the US, six states and Congress are weighing similar bills. “We’ve had two great exports from Germany: sauerkraut and the feed-in tariff,” says Jay Inslee (D) of Washington, one of the federal bill’s sponsors. “Germany has pole-vaulted over other countries when it comes to clean-energy technology, and that’s gotten people’s attention.”
The goal behind feed-in tariffs is to foster a growing network of small and medium-size energy producers. In Germany, at least a dozen communities now produce much or all of their own energy, using everything from ultrathin photovoltaic panels to cow manure. A few have gone even further. Residents of Dardesheim, a hamlet in the hardscrabble east, now own enough windmills to power 10,000-plus homes.
Supporters of the policy argue that such a grass-roots movement is the only way renewable energy will ever be deployed on a large scale. “The big energy companies have too many vested interests in sticking with conventional energy sources,” explains Hermann Scheer, a veteran parliamentarian who pioneered Germany’s feed-in tariff. “They will never be the driving force behind renewables.” (See the Monitor’s Q&A with Mr. Scheer.)
In many cases, market rates for renewables are too low to justify investing in equipment, which has stymied development. Advocates argue that requiring utilities to offer premium rates encourages renewable energy production and investment. This creates new jobs, speeds up development, and eventually drives down costs – while fossil fuel prices are likely to keep rising.
Not just for idealists anymore
Since 2004, employment in Germany’s green-energy sector has climbed from 160,000 to nearly 300,000. According to a study by Roland Berger, a research and consulting firm, green technology is expected to pass the auto and electrical engineering industries to become the nation’s No. 1 employer by 2010.
What’s more, since Germany adopted its first comprehensive feed-in tariff law in 2000, renewable energy has grown from 6 percent to 14 percent of the market, a milestone it didn’t aim to reach until 2010. Despite its cloudy climate, the nation now has more than half the world’s solar-power generating capacity, and is the leading destination for green technology investment with $14 billion invested last year alone.
These gains are funded by electricity consumers, who pay about $4 a month extra per household. Much of the profit also goes to ordinary citizens. Among them is architect Rolf Disch, whose home looks like an upside-down rocket with a giant, rotating solar panel on top. The building generates 9,000 kilowatt hours of electricity a year, five times more than it uses. By feeding this energy into the grid, he earns more than $3,000 a year. [Editor’s note: The original version overstated the amount of money Mr. Disch earns by selling his surplus electricity.]
“It used to be only idealists were interested in solar,” says Mr. Disch, a professed idealist who has designed solar cars and gas stations. “But now there’s money to be made from the sun.”