When the government was buying, everyone in Germany was eager to jump on the green bandwagon. One of the country’s storied soccer clubs joined the party, blanketing its new stadium with solar panels. The Guardian reports:
In 2008, shortly after the EU set its green energy targets for 2020, the Freimarkt funfair and Werder Bremen football club both switched to renewable power, with the club completely renovating its stadium in a business deal with energy company EWE….The Weser Stadium is armadillo-plated with 200,000 single module solar cells that resemble a huge postmodern lampshade. Next to it is a solar-powered restaurant.
But now, as the German government moves to phase out the subsidies that propped up purchases like Werder Bremen’s, institutions, companies, and individuals are starting to regret some of that enthusiasm. The Guardian continues:
[Klaus Filbry, the managing director of Werder Bremen] said that the removal of tax incentives for solar had already affected all clubs with tie-ins to renewable energy firms: “A lot of those partnerships were finished because of changes to the law and that certainly had a financial effect that was felt in the league. Less money came in. Our sponsorship with one company went down from €500,000 to €200,000. We were able to compensate and find other partners but it did hurt the club financially.”Subsidy cutbacks have been felt across the industry, as the cost of solar power has fallen closer to the cost of fossil fuel energy. From a zenith of $0.90 per kilowatt hour, German feed-in-tariffs that pay people for generating energy from solar have fallen to around $0.20 per kwh today. The guaranteed 20-year tariff offered to early household investors is now a thing of the past.
At the heart of Germany’s vaunted Energiewende were guaranteed long-term, above-market rates for renewable energy producers. These rates, called feed-in tariffs, were a form of government subsidy that was then passed along to consumers in the form of a green energy surcharge on their electricity bills. The bills skyrocketed and were soon among the most expensive in Europe, prompting Merkel’s coalition to move to water down these subsidies.Werder Bremen’s struggles are symptomatic of an unhealthy industry, thrust into the limelight before it was ready. Rather than propping up solar and wind with expensive subsidy regimes, governments would be much better served funneling money toward the research and development of new technologies that could help renewables compete on their own merit.