The German government is taking a different approach to solar power.
A new policy taking effect on May 1st will subsidize consumer purchase and storage of solar batteries. The program will cost 25 million euros ($32 million) next year and will be directly funded from state bank KfW.
The government will pay 660 euros ($870) per kilowatt of storage. The program will also fund 30 percent of the battery’s cost.
This may seem costly to the government, but it will place less of a burden on the grid by encouraging the public to use their own sources of energy—something that will ultimately save money for the government in the long-run.
It will also foster higher demand for solar energy.
In order to qualify for the subsidies, batteries must have a minimum lifespan of seven years. Solar power plants that use the subsidies must also supply at least 60 percent of output to the grid in order to prevent over-production, according to Clean Technica.
Plant operators can also apply for financial backing for PV projects conducted in 2013 with a maximum of 30 kilowatts.
The German government’s subsidizing battery storage is a good way to not only highlight energy conservation and cost-saving avenues, but also the entire solar industry, which could use a helping hand.
Energy Storage
Energy storage is one the most important components to the future of renewable power, especially solar. Solar batteries provide the backbone to an industry in which the energy source is not constant.
These storage devices could lure in potential customers who may think solar power is an unreliable source of energy when the sun is down. It’s true that the sun can only produce energy during the day, but if that energy could be captured and stored for cloudy days or night, the efficiency would be greatly enhanced.
Energy storage companies are also in a great position to market solar batteries to consumers and solar companies looking for a reliable energy source during power outages or other emergencies.
Solar batteries have been useful in residential areas, green automobiles, and even airplane prototypes such as the HB-SIA solar airplane.
Flux Power Holdings, Inc. (OTC: FLUX) specializes in battery technology of many types, including solar. PowerThru, SolarCity Corporation (NASDAQ: SCTY) and Greensmith are other companies that have made significant advances into the solar battery field.
Solar has hit a rough patch with investors and manufacturers, but there is still a glimmer of hope in renewable energy storage.
Will solar power in Germany make a healthy comeback as a result of the new subsidies?
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Future of German Solar
The new policy is obviously being well received by the solar industry in Germany and will no doubt boost revenue for energy storage and solar companies. After reeling from the dumping of Chinese solar panels on the European market, the industry needs all the help it can get.
And while I’m sure solar companies would love a return of ample government credits, subsidizing consumer purchases can be just as helpful to the industry because it will generate more sales of solar products.
German solar companies have faced a tough road, with many having to file for bankruptcy and make drastic cutbacks to remain solvent. SolarWorld (OTC:SRWRY), once Germany’s largest solar provider, is still in the midst of restructuring and negotiating with creditors, as reported by Reuters. However, there are some that have come away unscathed.
Solar Power Inc. (OTC:SOPW) is one German company that has multiple branches around the world. The company manufactures and sells photovoltaic products, including the SunPac S battery.
According to the company, SunPac provides 80 percent electrical feedback, and the battery received the German Energy Efficiency Prize of 2012.
Another battery will soon follow SunPac S, titled SunPac 2.0, with superior lead-acid technology.
Lead acid batteries are similar to car batteries and the preferred method of solar storage. Nickel cadmium is the second type of solar battery. While it can be more expensive, it discharges and stores energy much longer.
Unlike many nations in Europe, Germany is in a better place to provide assistance to the solar industry. Germany has a robust manufacturing sector that is able to keep the country above the fray of economic downturn by producing more exports.
According to Bloomberg, the German economy is set to grow 0.8 percent in 2013, which is double what the government expected. The economy is expected to grow 1.9 percent in 2014.
German state bank KfW, for its part, had a record profit of 2.4 billion euros last year. Its willingness to help the solar industry could be very important in helping it thrive.
But the old days of subsidizing solar may never return, as it is expensive to maintain the subsidies.
Germany alone cannot prop up solar energy, and solar has gone bust in many areas in Europe due to stiff competition from China and subsidy withdrawal. However, the German government is providing a ray of sunshine by encouraging consumers to switch to solar.
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