State subsidies screw up solar sector, surprisingly

Neglected Solar array
Credit: First Solar

NoTricksZone reports from Germany that the promised prosperity from the “Solar Valley” in the old East Germany has gone tits up.

After hundreds of millions of Euro in subsidies, the green hi-tech German future has lost its lustre.

How many times have we heard the chorus from those in power about the “green jobs” that are going to be created as we transition to the “Zero Carbon” (whatever that stupid statement means) economy?

With typical German efficiency, the government got behind their Energeiewende solution and spent up large:  “142 million euros in Brandenburg, 120 million in Saxony Anhalt and 143 million euros in Thuringia poured in.”

There was much self-congratulation from the politicians over how well they were doing, reported by the fawning press, eager to push the Global Warming, Climate Change barrow.

Like our bunch, German politicians were determined to show the world how it was to be done.

(At least with Germany being number 4 in world GDP ranking, there was some chance that they could be leaders.  New Zealand comes in at number 68 or thereabouts – we are not going to save the world by being zero carbon.)

However, as is often the case, economic reality popped up.  Low-cost solar cell imports from China flooded the markets, prices plummeted and the great Solar Valley dream collapsed.

Naturally, all this was propped up with huge green energy feed-in tariffs which pushed up the price to consumers.  What could possibly go wrong with artificially high feed-in tariffs?

As the Spanish found out: Quote.

Spanish newspaper El Mundo found that between November and January, 4500 megawatt hours (MWh) of solar energy were sold to the electricity grid between midnight and seven in the morning.

It has been suggested that some plants in the regions of Castilla-La-Mancha, Canarias and Andalucía have been using diesel generators connected to their solar panel arrays to illegally benefit from government subsidies.  End of quote.

Like the Spanish, the Germans had to cut the feed-in rates, which made solar systems less attractive. The market found itself flooded by solar panels and German manufacturers collapsed.

German publicist Dirk Maxeiner wrote (with sarcasm): Quote.

Through the path of  subsidies, German taxpayers created jobs not in Bitterfeld as planned, but in such beautiful cities like Guangzhou, Hangzhou or Xi’an.  End of quote.

The NoTricksZone post concludes: Quote.

And according to the Hans Boeckler Foundation: “No other industry grew so rapidly in the last decades as the production of solar cells has – and none has collapsed as fast.” It all took just 15 years.

The Hans Böckler Foundation describes how small start-ups transformed into tech market stars and then became insolvent one after the other beginning in 2011. Names like Solar Millennium, Q-Cells, Centrotherm, Conergy all collapsed as quickly as they sprang up.

Some 30,000 jobs were lost in a single year alone and private capital worth double-digit billions “was destroyed”.

According to the Hans Böckler Foundation, “Financial market experts are only disputing if it involves 30 or 50 billion euros.”

Today politicians and Germany’s green media are mysteriously absent in “Solar Valley” and the heap of ruin that was left behind. Yet, they continue to insist that green energies are the way to go and refuse to learn the lessons of the solar energy subsidy debacle.

As Maxeiner writes, green politicians such as socialist Stephan Weil of Lower Saxony have learned nothing. Today leaders like Weil are calling for a Verkehrswende (transportation transition) and a transformation of the automobile industry!

According to Maxeiner, leading policymakers seem to believe that the problem can be solved by continuing down the same wrong path of subsidies, but at a faster speed.

Maxiener asks: “What are we supposed to understand from the transformation of the automobile industry? Bicycles can be made by the Chinese even more cheaply.”

The German publicist then describes how leaders in the country are caught up in a “transformation craze” where everything needs to be fundamentally transformed, no matter whether it makes any sense or not.

According to Maxeiner, politicians like Weil are now demanding that the car industry “stop building cars that people want, and only then will everything be good.”

Maxeiner summarizes: Now that Germany has long run the solar industry into a wall, it appears politicians are intent on doing the very same with the country’s auto industry. But to accomplish that, it will be necessary to run its coal industry into a wall so that power for electric cars will be able to run on clean wind energy.

And where will these electric cars come from?  End of quote.

How far down this “green jobs” nirvana road is New Zealand going to travel before economic reality bites us in the backside?


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