Wednesday, December 10, 2008

Tariffs and Renewable Energy Requirements

Despite downturn, is German energy a model for Obama? from Reuters.

Germany is paying more for Solar energy, but the alternative is paying another country for cheaper energy. So there is some advantage on keeping the money in your own country. But, this makes me think of tariffs, and how those used to protect domestic industries. Is requiring a certain amount of power to be produced using renewable energies another form of tariff?

Theoretically, a company would be at a disadvantage by being required to pay higher energy costs because of a renewable requirement. The article does not answer the question is how much has the cost of energy for other users been increased? What are the above market rates?

Hybrids are a great example where if they don't make sense economically - ie high gas prices, most people won't buy them.

My opinion is since power companies in the US, or at least in California are regulated (ie the government decides how they will make a profit, that pushing solar to decrease the amount of money being sent out of the US makes sense in the long term.

I would like to see some analysis on if the increase in German demand for Solar has decreased the price of solar, or will it in the future? It has increased demand, which for a while increased prices, but theoritically this should be correcting itself with an increase in production. And with the increased production, this should have lowered costs due to economies of scale (the more you produce, the better you get at it, lowering the cost).

I found a chart of solar pricing including vs. electricity pricing. Basically in 2020 solar and what a consumer pays will be around the same! Only 12 years to go! Of course wind is pretty competitive now per the Economist Blowin' in the wind

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