S.A.G. Solarstrom AG: Concerns about planned change to Renewable Energy Act (EEG)
- Decline in sales anticipated for German market
- Act primarily affects German module manufacturers
- Consequences for S.A.G. Solarstrom AG manageable
- Current subsidies for renewable energies considerably less than follow-up costs for conventional energies
Freiburg, January 25, 2010. S.A.G. Solarstrom AG (German security identification number: 702 100, ISIN: DE0007021008), Freiburg, has serious concerns about the plans to change the EEG Act with regard to the feed-in tariffs for solar energy recently announced by the German Department of the Environment. Even though the outcome would remain manageable for the Freiburg company, substantial negative consequences are still to be expected for the German solar industry.
According to the current plans for ground-mounted systems, this area will have little chance in Germany if the plans are implemented from July, in the opinion of Dr. Karl Kuhlmann, S.A.G. Solarstrom AG’s CEO. “There is bound to be a slowdown in roof-top systems in Germany as well. At S.A.G. Solarstrom AG, we are well positioned internationally, so that we can compensate for this with our sales in other countries“, says Kuhlmann. Based on current knowledge, S.A.G. Solarstrom AG's sales, yield and thus workplaces in Germany are thus secured, thanks to diligent planning and successful sales activities.
. However, the assembly companies employed in Germany by the enterprise would be heavily affected, leading to certain reduction in jobs if the plans were implemented.
Heavy setback for German solar industry
S.A.G. Solarstrom AG expects particularly negative consequences for the module manufacturers based in Germany. “It must be made clear that such a heavy retraction in this area will quickly lead to a loss of jobs in Germany, while the Asian module manufacturers will certainly increase their market share in the short to medium term in this situation. These manufacturers already have an advantage now, due to large quantities and low wages, and this advantage will then make itself felt dramatically“, Kuhlmann fears. This will have a particularly heavy impact in the newly-formed German states. “That would be very shortsighted – it is precisely in these states that an implementation of the plans would foolishly jeopardize the market position we have achieved and thus put many jobs on the line“, says Kuhlmann. That implementing these plans might lead to a considerable tax deficit and strain on the social systems apparently does not seem to have been taken into consideration.
Costs for subsidizing solar energy low in comparison
In addition, from S.A.G. Solarstrom AG’s point of view, the current planned scope of subsidies for renewable energies has not been correctly assessed. “It’s always argued that by 2020 around 57 billion euros will have been spent on support in the area of renewable energies. However, it should be born in mind that around 20 cents per kWh are incurred in indirect costs for the conventional sources of energy, according to reliable estimates“, explains Kuhlmann. These include, for example, terminal storage costs for radioactive waste and damage caused by CO2. The energy business incidentally still needs to find long-term sustainable solutions for both problems. A conclusive example of the unsettled terminal storage issue, according to Kuhlmann, is the subject of ”Asse“. With 600 billion kWh power production in Germany, the economic costs deferred to our descendants still amount to 120 billion euros per year. The total of 57 billion euros spent on renewable energies in the years from 2002 to 2020, on the other hand, cover less than 3% of the economic costs incurred during the same period for conventional energy. Taking this into consideration, plus the tax revenue accumulated from the income of those employed in the area of renewable energies, it soon becomes clear that the EEG Act only compensates for a part of the unjustifiable competitive advantages of conventional energy sources. If the plans are implemented, social spending for unemployed people from the solar industry must also be taken into account.
“From an economic point of view, the EEG Act has at least corrected a part of a given market failure. By resorting to such dramatic cutbacks, this misallocation will be consolidated and a disservice done to the German national economy, in particular in the newly-formed German states“, says Kuhlmann.
Solar power production is local and ecological
Ultimately, the decentralized principle of photovoltaics is also being completely neglected in the assessment. It offers a very large number of households the option of self-sufficient power, sustainably over several years. “We hold plants that have been producing electricity for over 15 years without any problems“, says Kuhlmann. The ecological “yield factor“ is also positive – within 2 to 5 years both the energy consumption at production and the output of CO2 have been “earned back“. And residual waste would not be accrued either in the event of deconstruction. If one compares these positive aspects of solar energy with the corresponding problems of conventional energy production, the sustained benefits of photovoltaics become particularly clear.
About S.A.G. Solarstrom AG
S.A.G. Solarstrom AG (German security identification number: 702 100, ISIN: DE0007021008) of Freiburg, Germany, are a manufacturer-independent provider of high-quality photovoltaic plants configured to customers’ individual needs. The group constructs efficient plants of all sizes both in Germany and abroad. S.A.G. also produce solar energy at their own plants.
S.A.G. Solarstrom AG’s service portfolio covers the entire life cycle of photovoltaic plants, including energy- and weather-data management, yield reports, and remote maintenance, as well as insurance and financing. The group thus offers a comprehensive value chain in photovoltaics, from yield reports, planning, construction, operations, and monitoring to optimization, repowering, and deconstruction.
Founded in 1998, S.A.G. Solarstrom AG are considered pioneers in the solar industry. Around 160 specialists work at S.A.G.’s four locations in Germany and subsidiaries in Italy, Spain, Austria, and Switzerland.
S.A.G. Solarstrom AG are listed on the open market, Entry Standard of the Frankfurt Stock Exchange as well as according to the rules and standards M:access of the Munich Stock Exchange.
Further information: www.solarstromag.com
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