Germany's solar cell promotion: Dark clouds on the horizon
[Frondel et al, Energy Policy, Nov 2008; also available from here] This article demonstrates that the large feed-in tariffs currently guaranteed for solar electricity in Germany constitute a subsidization regime that threatens to reach a level comparable to that of German hard coal production, a notoriously outstanding example of misguided political intervention (...) For the first scenario [if it had ended in 2007], we have estimated real net cost of approximately 26.5 Bn€, while an abolition in 2010 [after the next federal election] comes at similarly large additional net cost of about 27 Bn€ (in prices of 2007) (...) We argue that in the early stages of development of noncompetitive technologies, it appears to be more cost-effective to invest in research and development (R&D) to achieve competitiveness, rather than to promote their large-scale production.