In a long-awaited decision in mid-May, the German government announced it will soon lift restrictions on feed-in tariffs (FITs) for solar power, which would have crippled the sector. But why was the limit set at 52 GW in 2011, and what do we think that solar will ever be able to do without policy support? Craig Morris takes us back to the origins of a controversial policy that has been criticized for a long time.
Your German word of the day is Solardeckel, which could be literally translated as a “solar lid.” If you are wondering why anyone would want to put a lid on solar during this climate crisis, welcome to German policymaking.
Back in 2011, a ceiling was placed on solar FITs. Once 52 gigawatts (GW) had been installed, FITs would no longer be offered. Which raises two questions: why 52 GW – why not something round like 50 GW? And when will solar be cheap enough to compete without any policy support?
Listening to the scientists
Back in 2010, Germany had a sort of master plan for the Energiewende called the Leitstudie or “lead study.” That year’s version expected 52 GW of solar to be built by 2020. This number was then also submitted in 2010 in Germany’s National Actional Plan for 2020.
But the Leitstudie does not say anything like “we won’t need FITs any longer then.” In fact, it derives no policy proposals at all; it’s a scenario. What apparently happened is that some politicians decided that FITs would have to go at some point, and 52 GW gave them a scientific-sounding number.
Granted, I have found no proof – no ministry saying “hey, let’s use the Leitstudie to set a limit on FITs”. The main author of the Leitstudie, Joachim Nitsch, told me on the phone for this blog post that he cannot remember ever having been contacted about 52 GW or the solar ceiling. He reiterated that he had not called for any policy changes in the study. But he also does not seem to have ever complained about the seeming connection between this policy and his study.
No one seems to have made the specific complaint that policymakers misused a study for a policy change not even investigated in the very study. For instance, one of the solar ceiling’s greatest critics, Germany’s first Professor of Renewable Energy Volker Quaschning, wrote in 2012 (in German): “The scientific reasoning behind the number 52 is very suspect.” But he bases his criticism on the study’s assumptions, which he found too timid. Germany added 7.5 GW in 2011, so he expected the ceiling to be hit “sometime between 2014 and 2018.” Clearly, he underestimated the will and ability of German politicians to slow down the growth of solar.
But does this case constitute misuse of science? Hannes Gaschnig is working on the interplay between energy models and policy-making in the EU SENTINEL project at the IASS. And he says “misuse is a strong word. If [the 52 GW] was taken out of context, we urgently must distinguish between intentional and unintentional misuse. Intentional would be if someone knows that a scientist said politics should not take the results in a specific way, but they still did. Unintentional is all other cases. And, from my perspective, it is the much more frequent case, meaning that almost nobody intentionally misunderstands results.”
But there is a third category: politics draws a conclusion from a study on a matter the study did not even investigate. That seems to be what happened here, and it’s not uncommon (by the way, dear readers, if you know what this is called, drop me a comment below). In fact, the foundation that funds this website has even done it – and the case concerned FITs. A study from 2014 (which I reviewed in this very blog) claims in the foreword (not by the study’s author) that FITs are “necessary in the beginning, but not tenable in the long run.” The study says no such thing, and a few years later I had coffee with the study’s author. “That statement in the foreword really bothered me,” he confessed.
In justifying the solar ceiling, the government never seems to have said it was set at 52 GW because of the Leitstudie, but they did give two reasons (in German) for its existence: 1) “solar has been growing so fast the grid cannot keep up” and 2) “there are not enough incentives to bring costs down and integrate solar in the market” – the latter being shorthand for “markets will bring down prices, so FITs have to go.”
Can solar do without policy support?
This one is easy: no.
Sure, solar is now cheaper than coal, gas, etc., so it is increasingly being built instead of fossil and nuclear simply based on the business case. But policy still matters.
Back in 2011, the Holy Grail of solar was grid parity, that magical point where solar power from your roof would cost the same or less than the retail rate – at which point everyone would build solar regardless of policy. As I wrote in 2011, that was nonsense. In fact, Germany reached grid parity around 2011/2012, and the market collapsed – because of policy changes.
The grid parity target assumed that you could just run your meter backwards and offset power from the grid in a net calculation. But Germany never had this kind of net-metering. US states have at various times also imposed “solar taxes” – a monthly surcharge to discourage such a switch (such as 50$ a month in Arizona in 2015).
So yes, policy will always matter for solar. Just look at the dismay in the German solar sector as the ceiling approached – and the relief when it was finally, at the last minute, done away with.
+++ Update: On 27 May 2020, the German parliament unexpectedly failed to do away with the “solar ceiling,” allegedly because no law could be found to which the amendment could be attached as a rider. The next opportunity will be in two weeks.
This article was first published on 26 May 2020. Latest update: 28 May 2020.