A report recently released by Finadvice, a German-based financial firm, provides insight on Germany’s experience with large energy subsidies. The report, “Development and Integration of Renewable Energy: Lessons Learned from Germany,” highlights the unintended consequences of prior energy regulations and subsidies in Germany.
According to the report, some of the effects of Germany’s subsidy policies include:
- A drop in wholesale electricity prices—from $117/megawatt hour (MWh) (€90-95/MWh) in 2008 to $48.1/MWh (€37/MWh) in 2013.
- The build-out of transmission grids at a cost of $52 billion (€40 billion) over the next 10 years.
- An increase in electricity prices for consumers, from $.18/kilowatt hour (kWh) (€0.14/kWh) in 2000 to more than $0.38/kWh (€0.29/kWh) in 2013.
The study concludes that the United States has an opportunity to take Germany’s experience into account to achieve positive results from integrating renewable energy sources into the grid.