How the German energy transition has committed taxpayers to paying billions of Euros for the sun to shine

The sun has become very expensive all of a sudden.

Climatism in Germany is attended by all manner of naive ideas and bright pink fairytale slogans. Among the latter is a dubious proverb proclaiming that “The sun doesn’t send any bills” (in German: “Die Sonne schickt keine Rechnung”). Such proverbs always seem initially plausible (is there anything freer and more democratic than sunshine?) while proving to be basically the opposite of the truth. In fact, the energy transition has landed German taxpayers in the position of paying billions of Euros for the sun to shine. It is becoming an unmitigated disaster, and what is worse, the more we expand solar capacity, the more we will have to pay. For something that does not send any bills, sunshine has sure become very expensive here in the Federal Republic.

Welt calls it “the solar trap,” and it works like this: Our Renewable Energy Sources Act (EEG) pledges to pay renewables producers fixed tariffs for every kilowatt hour of electricity their installations feed into the grid. Whether you are an ordinary climate-conscious person with solar panels on your house or you run massive solar farms, the EEG entitles you to receive these fixed “feed-in tariffs” for a period of twenty years. The EEG also requires grid operators to accept your electricity regardless of demand and to sell it on the electricity exchange.

Now the sun, although it may not charge for its services, turns out to have this naughty habit of shining in many places all at once. When this happens, electricity supply often exceeds electricity demand and exchange prices fall. They can fall all the way to zero, or in extreme situations of excessive sunshine they can even go negative. Negative prices mean that you have to actually pay “buyers” to take the excess power off your hands. Whether the prices are merely very low, or zero, or negative, the German taxpayer has obligated himself, via the EEG, to pay these producers of unwanted if extremely green and climate-friendly electricity their fixed feed-in tariffs anyway. That is, we are on the hook for the difference between the actual exchange value of excess electricity and the feed-in tariffs promised to producers. In this way we have ended up literally paying for the sun to shine.

In September alone, Germany paid 2.6 billion Euro to renewables producers for electricity that had a market value of a mere 145 million Euro. Our sunny autumn is destroying our already-fragile government budget. Federal number-crunchers had originally allocated 10.6 billion Euros for feed-in tariffs in 2024, but already the government owes 15 billion and the year is not yet over. Scholz’s cabinet are thus trying to allocate an additional 8.8 billion Euro for the rest of the year. The parliament have yet to approve the additional funds, though, and also the damned sun will just not stop fucking shining, and so probably even this supplementary allocation won’t be enough. We’re bleeding money, all for a sun that doesn’t send any bills.

This problem will get worse before it gets better. The more solar panels we install, the greater oversupply we’ll face when the sun shines, and the larger the spread between the fixed feed-in tariffs and the actual market value of this green electricity. In 2024, as I said, the government projected that feed-in tariffs would cost 10.6 billion Euros, but they’ll probably end up costing 20 billion at least. Next year, the costs are projected to be even higher, and the year after that, they will be higher still. As Welt report, the German government plans to triple our solar capacity to 215 gigawatts over the next six years – “the equivalent of 215 nuclear power plants” every time the sun emerges from behind a blessed cloud.

The energy transitioners know they messed up. The new plan is to change the rules for solar subsidies. When prices go negative, larger producers won’t receive their fixed tariffs, and they’ll also have to sell their electricity themselves. In this way, they will become newly sensitive to market demand and stop overproducing electricity when nobody wants it. It is almost like creating a blind system totally oblivious to market incentives was a bad idea. Unfortunately, the new rules will apply only to new solar installations. The German government will still have to honour its insane agreement to pay the operators of older solar plants for years to come. We will light billions on fire for nothing.

You’ll also note that these new rules only target larger operators. The millions of small operators out there – all the ordinary people who have bolted solar panels to their roofs – constitute a serious, ongoing problem for which nobody has any solution at all:

In the long term, [energy economist and government adviser] Lion Hirth believes that “all electricity producers will have to operate directly on the electricity market.” Even the owners of small rooftop photovoltaic systems would theoretically have to become direct marketers, because only this would provide the economic incentive to take their system off the grid when there is an electricity surplus. “In principle, I consider the expansion of direct marketing to be the only sensible approach in the long term,” Hirth said ... Direct marketing, however, is also highly regulated at the bureaucratic level and also expensive, so it is hardly an option for small systems.

Hirth notes that rooftop installations also don’t make any economic sense. They are three times more expensive, per unit of capacity, than large solar fields. Yet we can’t get rid of these small operators, because climate change propaganda has generated a whole population of eager-beaver German greenists who want to make a personal contribution to stopping climate change by screwing renewable technology to their roofs. As always, climate politics prioritise individual consumer choices and experiences over pragmatic, system-wide outcomes, because at base the Green voter does not really want to stop CO2 emissions. He wants to have the experience of stopping CO2 emissions, and that is not even nearly the same thing.

In the meantime, all budget planners can do is “hope for bad weather” to “decrease solar power feed-in and cause electricity exchange prices to rise again.” Before our Renewable Energy Sources Act, the sun indeed did not send any bills, but in our desperation to change the weather we have created an artificial system in which it will not stop sending them. Ours is truly one of the dumbest eras in human history.