The Washington Post is reporting today that many European countries are dramatically cutting solar subsidies to the solar power generation industry. Why?
Because governments are going broke. As the Post explains:
Across Europe, governments are slashing public spending to cut their deficits, and green-energy subsidies are a target, too, even as solar power accelerates in the United States, helped by sympathetic federal policies and an increase in subsidies that came as part of the federal stimulus program.
German policymakers indicated last week that they planned to cut once-generous subsidies as much as 29 percent by the end of the month, on top of a 15 percent cut in January, although some details were still being negotiated after protests from the solar industry. Britain and Italy have made similar moves, and in January, Spain abandoned its subsidies altogether, prompting outrage from the solar industry. …
“Everybody knows we can’t go the way we’ve been going,” said Miranda Schreurs, the director of the Environmental Policy Research Center at the Free University of Berlin and a government adviser. “It’ll break the bank.”
The Post notes that solar photovoltaic installations generate just a bit over 3 percent of Germany’s electricity. How much do German consumers pay for the privilege of using electricity generated by subsidized solar power?
The subsidies for renewable energy cost German consumers about $14 a month for a family of four. Companies that generate renewable energy get a guaranteed above-market rate for 20 years.
Just for comparison, the average price that a consumer pays for a kilowatt-hour of electricity in Germany is 36 cents. The Energy Information Administration reports that the average price in the U.S. is 9.8 cents per kilowatt-hour.