Tuesday, February 16, 2010

German coalition can't agree with itself

On top of an unbelievable discussion about welfare reform in Germany (the Libertarians want to reduce welfare payments, while their coalition partners, the Christian Democrats, will have none of it), we now have an argument about solar on farmland.

The libertarians (FDP) want to move the focus of feed-in rates from building-integrated systems to ground-mounted systems, including those on farmland. They correctly claim that such systems are cheaper and will therefore bring the price of solar down faster (which may not necessarily be the case, but I'll skip that part here for brevity's sake).

The CDU counters that even disused farmland should not be covered with solar panels for 20 years and that it makes more sense to use available roof space.

Here, we clearly see that the libertarians are prone to the kind of MBA thinking that dominates US politics, which is why I always say that "the Democratic Party in the US is closest to Germany's FDP, and that the Republican Party in the US is also closest to Germany's FDP." The libertarians are only able to focus on the price of solar where it is connected to the grid, and their MBA thinking is largely double-entry bookkeeping: money coming in, money going out.

That's fine if you are running a business, but then these folks have no business being politicians running a country (which, incidentally, means that the Democrats and Republicans also need to get out of politics). Politicians would be well advised to think in terms of macroeconomics, not microeconomics; the former is circular, not double entry. Money that leaves definitely comes back to you in some form or another in a national economy, whereas if you are running a bakery, it may not.

In the case of solar on buildings, the question is actually one of democracy. If we only have large arrays in the field, then we end up with corporation-driven investments in renewables, which is what we have in the US right now with solar and wind already. In Germany, ordinary citizens can become involved with installments of 5, 10, or 20 thousand euros.

So the question is not just whether economies of scale make solar slightly cheaper on valuable farmland. The question is also whether we want to allow ordinary consumers to become producers.

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