Renewable energy Big Picture: part two by Zachary Shahan

CleanTechnica

Continuing on from Renewable Energy Big Picture: part one, here’s Renewable Energy Big Pic: Part 2. As noted yesterday, this two-post series is basically a presentation I gave to a class of renewable energy graduate students.

German Solar vs US Solar

As noted yesterday, German solar and US solar have both been growing at a fast pace for several years now, and the price of solar in both countries has been dropping steadily. However, looking at the solar power capacity of each country in a relative manner, Germany has over 21 times more solar installed per capita than the US (301.47 MW per million people compared to 13.973 MW per million people).

That’s not the only big difference between US and German solar, though. The price of solar power in the US is also a lot different than the price of solar power in Germany. We had an article back in June noting that installed solar power in Germany was at about $2.44/watt, while it was $4.44/watt in the US. The price of solar in both countries has dropped a bit since then, but the general difference remains.

And the difference exists across all solar power project sizes, as this Lawrence Berkeley National Laboratory (Berkeley Lab) chart from November’s Tracking the Sun report shows:

So, why is solar so much cheaper in Germany?

A number of people have looked into the matter in a bit of depth. For example,CleanTechnica contributor John Farrell has produced a chart showing by how much the various costs of solar vary in the two countries, as part of his report on the matter, “Cut The Price Of Solar In Half By Cutting Red Tape.” Here’s that chart:

Here’s another chart on the split, this one from Berkeley Lab:

Some comments from Berkeley Lab: “[1] German installers reported average soft costs of $0.62/W in 2011, which is roughly $2.70/W lower than the average soft costs reported by U.S. installers… [2] Customer acquisition costs averaged just $0.07/W in Germany, or roughly $0.60/W lower than in the U.S.”

Soft costs, red tape, acquisition costs — this is where the party’s happening (or not). But now that we’ve nailed down where the price difference is occurring, how about a bit of reflection on why it’s occurring?

One noticeable cause, I think, is simply that Germany has a much more mature market. (Again, it has over 20 times more solar power installed per capita than the US.) As a market matures, competition increases, there are more economies of scale, and costs come down.