Germany racked up one economic success after another for most of this century. But the loss of Russian natural gas due to the war in Ukraine has dealt a severe blow to its industry through higher energy costs.
The subsidies did not run out. They were cut overnight, without much warning, so the industry could not adapt. Even worse they cut legally guranteed subsidies of already finished projects, meaning nobody in the industry trusted the government anymore, as subsidies cut be cut at any point without warning.
Industry needs a stable planning enviroment. If you cut heavy subsidies do it over time in clearly communicated steps, not overnight and breaking previous gurantees.
While yes, the feed-in tariffs dropped in price and capped eligible additions once 52GW of capacity was installed, this only shook the heavily propped-up domestic market. Had the German manufacturers produced anything better than the rest of the world they could have exported their stuff as German engineering did since forever. However, what they produced was nothing special, solar panels are pretty low-tech that can be produced in China for a fraction of the cost in the same quality so naturally they win out. All the money should have went to the development of high-end solutions that demand engineering and manufacturing prowess and cannot easily be copied, not focus and subsequently rely on shipping lots and lots of units. This is a game high-income countries will always lose in today’s globalized economy.
Two things. First of all when you just decide to shut down all your nuclear power plants, you need to come up with a plan to replace the low carbon electricity in the grid. Solar installations in Germany dropping by 2/3 is really not a good strategy in that case.
Then it was not just solar panel manufacturers, but also tooling manufacturers, who often were bought out by Chinese companies, with Chinese government money. That is the actually intressting part of the manufacturing chain.
The subsidies did not run out. They were cut overnight, without much warning, so the industry could not adapt. Even worse they cut legally guranteed subsidies of already finished projects, meaning nobody in the industry trusted the government anymore, as subsidies cut be cut at any point without warning.
Industry needs a stable planning enviroment. If you cut heavy subsidies do it over time in clearly communicated steps, not overnight and breaking previous gurantees.
While yes, the feed-in tariffs dropped in price and capped eligible additions once 52GW of capacity was installed, this only shook the heavily propped-up domestic market. Had the German manufacturers produced anything better than the rest of the world they could have exported their stuff as German engineering did since forever. However, what they produced was nothing special, solar panels are pretty low-tech that can be produced in China for a fraction of the cost in the same quality so naturally they win out. All the money should have went to the development of high-end solutions that demand engineering and manufacturing prowess and cannot easily be copied, not focus and subsequently rely on shipping lots and lots of units. This is a game high-income countries will always lose in today’s globalized economy.
Two things. First of all when you just decide to shut down all your nuclear power plants, you need to come up with a plan to replace the low carbon electricity in the grid. Solar installations in Germany dropping by 2/3 is really not a good strategy in that case.
Then it was not just solar panel manufacturers, but also tooling manufacturers, who often were bought out by Chinese companies, with Chinese government money. That is the actually intressting part of the manufacturing chain.