German Solar, Despite Woes, Grows 7.5 GW

Germany has reported a record growth in the energy capacity of its solar power industry.

Figures released by the Federal Network Agency (FNA) show that the installed capacity of the country’s solar facilities grew by 7,500 megawatts (MW) — 7.5 gigawatts, on other words — in 2011. The FNA, which oversees Germany’s energy sector, said that in December 2,980 MW was added.

A solar energy filling station in Freiburg, Germany

Image via Fraunhofer ISE

Germany is one of the world’s leading producers of solar energy, producing enough power last year to supply 5.1 million German households. The country’s network of photovoltaic cells raised electricity output in 2011 by 60 per cent over 2010 to 18 billion kilowatt hours. That represents over 3 per cent of the national power grid. In fact, to give an indication of just how far ahead Germany’s solar industry has reached, the country produces more solar power in a month than the United States does in a year.

However, Germany’s rapid advance as a solar nation has been helped in large part by government subsidies. Solar farm operators and homeowners with solar panels on their roofs collected more than €8 billion ($10.4 billion) in handouts in 2011. These subsidies have led to German consumers having to pay the second-highest electricity prices in Europe.

Last year the German government cut  its €100 billion ($130 billion) subsidy package to the solar industry. As a result, a string of solar companies have declared bankruptcy, the most recent of which, Q-Cells, saw its market value drop from €8 billion ($10.4 billion) five years ago to just €35 million ($46 million).

It is the fourth major bankruptcy in the sector, and it underscores the degree to which German solar firms are being outpaced by competition from China.

The FNA said that in spite of the capacity increase, the market had slowed down noticeably from the previous year, especially in the class sizes between 10 and 50 kilowatt. While in 2010 over 2,600 MW of capacity were installed in this same class size, that figure was reduced to just 2,000 this year—a decline of 22 per cent.

The agency said that while in the east of the country smaller and medium-sized power plants had shown positive growth rates, in areas where solar was more established, such as Bavaria, market volume had dipped.

“Overall, the established states seem to be in retreat,” the FNA said in a press release to accompany its report. “The first signs of saturation may be a possible explanation for this but the strong growth rates at the end of the year tend to suggest that the demand is still healthy.”

Paul Willis has been journalist for a decade. Starting out in Northern England, from where he hails, he worked as a reporter on regional papers before graduating to the cut-throat world of London print media. On the way he spent a year as a correspondent in East Africa, writing about election fraud, drought and an Ethiopian version of American Idol. Since moving to America three years ago he has worked as a freelancer, working for CNN.com and major newspapers in Britain, Australia and North America. He writes on subjects as diverse as travel, media ethics and human evolution. He lives in New York where, in spite of the car fumes and the sometimes eccentric driving habits of the yellow cabs, he rides his bike everywhere.