NYTimes
http://www.nytimes.com/2010/11/24/opinion/24iht-edmiller.html
November 23, 2010
Power From on High
By DAMIAN MILLER

Two things happened last month to give us pause to reflect on clean
energy. First, Germany added the equivalent of nearly 1 percent of its
electricity supply with solar energy between January and August. The
first 1 percent took 10 years to achieve; the next 1 percent just 8
months. Second, the author of this revolution, Hermann Scheer, died.

Scheer was a German politician, a Social Democrat who entered the
Parliament in 1980. He was also an author, environmentalist and a
powerful agent of change in the fight for a clean-energy future. He was
called many things, from “solar king” to “the Stalin of renewables.”
Within the solar industry, the title was more prosaic — “the father of
the feed-in tariff.”

Introduced in 2000, and dubbed “Scheer’s Law,” the feed-in tariff
enabled owners of a renewable energy system to sell the power they
generate at attractive rates, and mandated utilities to buy it. This
helped all renewable energy, but it particularly helped solar
photovoltaic (PV) energy.

Before this, solar PV panels, which convert light into electricity,
could only compete on remote sites, off the electricity grid, where it
was too expensive to transport conventional fuels and electricity. Now,
solar PV could be profitably installed on any south-facing structure
and connected to the grid, turning homes, offices, warehouses and farms
into solar power plants.

How did Germany fund its feed-in tariff? Not with annual budgets, or
stop-and-start tax credits, but with an elegant surcharge on
conventional electricity that adds a bit more than a euro per month to
the average German electricity bill.

At the time, I was working for Shell Solar, a subsidiary of the oil
company, heading a division focused on rural markets in the developing
world. I remember watching with amazement as the new grid-connected
solar market surged past the off-grid one — and as Shell bought Siemens
Solar, catapulting itself to No. 3 position in the solar industry.

But this would not be a market suited to Shell and other slow-moving
oil companies. Within three years, Shell fell from 3rd to 10th in the
solar industry, and then quietly exited in 2006. At the same time
former no-name solar companies, charged with entrepreneurship and
venture capital, sped past and helped forge an entire industry.

With rapid growth came thousands of smaller solar companies, focusing
on ever more specialized parts of the solar value chain and generating
a whole new species of green jobs. Solar power plants that started at
just 1-5 megawatts grew to more than 50 megawatts. Now plants of 250
and 550 megawatts are being contemplated in California, and of 2,000
megawatts in China — the size of several large coal-fired power plants.

In line with this maturation of the industry, country after country has
followed the German model of feed-in tariffs — Spain, Italy, France,
Czech Republic, Korea and recently even cloudy Britain.

Wholesale solar panel prices spiked from $2.5 per watt in 2002 to more
than $4 by 2007. With the financial crisis, solar modules plunged as
low as $1.5 per watt, but the industry is now primed for another round
of growth.

Seeing this unfold over the last 10 years, I stand in awe of what
Germany has achieved. Today 2 percent of Germany’s power is supplied by
solar, and if the country follows current trends, it will be 20 percent
by 2020. There’s a lesson here for America and the world on how to
proceed with climate change.

As Scheer used to say, you didn’t need a global treaty for mobile
phones to spread. Putting the treaty before the technology was putting
the cart before the horse. Do solar in the name of clean air, energy
security, and job creation, and in doing so, pave the way for a
solution to climate change.

Look at the Montreal Protocol, which effectively banned CFCs and
plugged the hole in the ozone layer. In that case, the replacement
technology (HCFCs) was available and cost-effective, corporations had
an interest in promoting it, and governments willingly signed on.

The United States is one of the two top energy consumers in the world
(along with China), so the world cares how fast America becomes
convinced that there is a viable replacement to fossil fuels. The
domestic American market should reach 1,000 megawatts next year. But to
put that in perspective, Germany next year could add 1,000 megawatts in
just 1.5 months.

To catch up, President Barack Obama needs to push for a federal feed-in
tariff, or a mandate for states to have one, and fund it with a
surcharge on conventional power — small enough to pass, but big enough
to move solar away from cumbersome grants and tax incentives that come
and go with the annual budget circus.

And Obama needs to make his case not with climate change, but based on
clean air, avoiding oil spills, the specter of peak oil and reduced
dependence on the Middle East.

Of course, opponents will cry “tax.” But the German feed-in tariff adds
the equivalent of only about $2 per month to the average electricity
bill. Is that so great a price for energy security?

There is no other energy source that feels so right. The sun comes up,
and in just one hour the world receives enough energy to power its
needs for a year. I salute Hermann Scheer for harnessing its power so
effectively, and encourage America and the world to learn from
Germany’s example.

Damian Miller is the chief executive officer of a leading provider of
solar energy in India.
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