The solar industry boom in Germany

Abstract

In the last two years, significant photovoltaic installations have been built in some European countries, especially in Germany and Spain. The number and capacity of both private rooftop and free field solar power plants are expanding quickly. In Germany the new installed capacity has doubled from the year 2009 to 2010 and boasts a current capacity of 17.000-18.000 MW electric power (effectively this is the capacity of 3-4 new nuclear power stations). In spite of the fact that solar power is the most environmental friendly energy source; some other countries like Belgium, Holland, and the Czech Republic have revised their subsidy strategies for the industry. This study evaluates the situation in Germany, running a quantitative analysis on installed capacity over the last five years. As technological standards get more conventional, the module prices fall significantly as does the extreme oversupply. However, the guaranteed subsidy schemes are not downgrading proportionally to module prices, this has led to the overheated market situation we are facing in Germany. Furthermore, this study shows the cost for households. The key questions are rising prices for electricity that all households face and the political discussion behind the new industrial revolution. This latter concerns the fact that the biggest supplier of these technologies is no longer Germany itself, but the Far East; the subsidy is flowing out of the country. Several approaches such as PESTLE analysis are applied within the analytical framework. The recommended output will be critically appraised based also on a literature review to identify the potential limitations and obstacles to further growth in the sector. Keywords: Sustainable economy, photovoltaic, solar economy, sustainable growth, feed-in tariffs, solar industry, Renewable Energy