Solar panels in every home – why solar panels are cheaper in Germany

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The Lawrence Berkley National Laboratory (LBNL) has recently published a study that looks at the price differences in the solar panel industry in Germany and the U.S. By looking at pre-incentivized prices paid for customer-owned systems, they were able to pinpoint the major differences between the two countries.

In the last five years, German solar panel prices have dropped by more than 50%. Some places in the U.S. are almost on par with German prices, but on average the study found a pretty significant gap:

The most obvious difference between the United States and Germany is the total amount of solar power installed in each country—there’s five times as much installed in Germany.

The study found that the soft-costs (i.e. permitting, licensing, connecting to the grid and other business processes) of solar panel installations, which account for everything except the hardware (i.e. solar modules, inverters), were much higher in the U.S. compared to Germany. In fact, average German soft-costs were at $0.62 per watt in 2011 – $2.7 per watt lower than soft costs reported by installers in the U.S. Another way of looking at it is that German soft-costs are 20% of the prices in the U.S.

Additionally, the permit process is streamlined. It takes only eight days to license and install a solar system in Germany, compared to 120 to 180 days in the United States.

It is important to realize that what has contributed to Germany’s rapid growth in the solar industry (and the rest of their renewable sector) is their feed-in tariff scheme – an intrinsic part of Germany’s Renewable Energy Sources Act (EEG) a law that was already passed back in 2000.

“In the United States utilities have little interest in helping customers generate their own power. Secondary state regulatory agencies and local governments impose burdensome permitting and siting requirements that unnecessarily raise installation costs.” said environmental lawyer Robert F. Kennedy Jr., who is calling for the installation of solar panels in homes being rebuilt after Hurricane Sandy.


Author: Andreas Weitzell, Trainee Charlotte Office

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