Cost of Solar in Germany at 0.14% of GDP

I was wondering how the cost of solar feed-in tariffs in Germany measure up compared to German GDP.

To find out, I pulled a number of 2,436.33 billions of euro from the International Monetary Fund website. The cumulative cost of solar feed-in tariffs from 2000 to 2020 is about 70 billion euro, according to the latest Fraunhofer report (page 14). That number will go down in the long term and eventually become negative, as electricity from fully paid for solar panels is available at zero marginal cost.

That’s 3.5 billion a year, or 0.14% of GDP.

Considering that the Stern report in 2007 already recommended investing at least 1% of GDP in countermeasures to climate change, that number is a good start, but still far not enough. Especially considering that in 2008 that recommendation was upgraded to 2%.

I also recall the proposal of former Maldives President Mohamed Nasheed to invest at least 2% of global GDP in renewable energy, a proposal I support.

If Germany, the world leader in solar power and the model case for the energy shift away from nuclear and fossil fuel, is at only 0.14% GDP for solar, there seems to be still a lot of work to do to reach that 2% goal. Bloomberg reported $260 billion worldwide investment in renewable energy for 2011, which is still far short of the goal of 1.4 trillion (2% of global GDP). And global investment in renewable may well decline in 2012, because rapidly falling prices per unit mean that even with more units installed, the necessary investments go down.



Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003,

3 thoughts on “Cost of Solar in Germany at 0.14% of GDP

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