There's a solar revolution going on and Germany is leading it - switching to solar energy faster than any other country in Europe. Energy experts estimate that in 40 years, Germany - one of the most industrialized countries in the world - will be entirely powered by clean energy.

It seems like a miracle. But there is an explanation - it's called "standard offer contracts" - an agreement by the government to buy solar power from individuals. It's helped kick-start a solar revolution in Germany, along with a revolution in power distribution.

The key to it is a 20-year contract. In Germany, if you produce solar power on your rooftop the government will buy it back from you at 62 cents a kilowatt hour. Here in Ontario, a similar program will be launched this fall. Homeowners who want to invest in solar technology can take those 20-year contracts to the bank. The contracts provide financial institutions with a government guarantee that the borrower will receive income from his investment.

Standard offer contracts, or "feed-in tariffs", as they're called in Europe, have turned Germany into a world leader in solar energy. Many other countries such as India, Portugal, Japan, Spain and Denmark have some form of these incentive programs for feeding electricity generated from renewable energy into the grid. The market development stimulated by this - initially in the wind energy sector - created jobs for over 20,000 people in Germany and 15,000 in Denmark.

As a result of the associated economies of scale and competition among manufacturers of windmills, production costs have been reduced by 50 per cent since 1991, and demand is growing around the world, stimulated by the improved technology.

Hermann Scheer
(Courtesy Hermann Scheer)

Hermann Scheer, the man behind this revolution in Germany, is a veteran of the Bundestag, the German parliament. After 20 years of selling the concept to the German public, his revolutionary ideas were legislated in 2001 when the Renewable Energy Sources Act was passed. Scheer attributes the success of the program to what he calls an "irresistable combination of freedom and autonomy" - freedom for individuals to generate their own power and do good for the environment at the same time, two values that often conflict.

Audio:
Mary Wiens talks to Hermann Scheer
and Jed Goldberg (runs 9:58)
REAL   WINDOWS   QUICKTIME

As Scheer puts it, "Normally, social commitment and individual freedom are contradictory. But with renewable energies, you can get both."

Scheer says it's hardly surprising that Germans were so quick to invest in solar energy once the legislation gave them the opportunity.

"I was not surprised." Sheer laughs. "I was the initiator of this law. It happens what I have forecasted. As soon as people are informed and they get an awareness of renewable energy, all people would prefer clean, 'forever' energy instead of using atomic, coal or other fossil energies. The chance to get clean energy forever is a unique chance, and normal people would prefer that."

But these changes are typically met with resistance. Traditionally, large producers exert great influence in all countries on the political process. They also complain of losses if users switch from conventional capacities to the operations of new competitors.

Scheer says there's also a tendency to underestimate the potential of renewable energies. In his experience, most energy experts, even those with solar expertise, have links to the conventional energy economy. "It is mainly a mental barrier," says Scheer. But it's not just a question of underestimating the potential of renewable energies. Scheer, who has notched up several decades of battling advocates of nuclear energy, says the opposition is often fierce.

"The energy companies who carry the present energy system try to terrify the people with the argument against renewables that it would cost too much," says Scheer. "Or they try to terrify the governments that the potential of renewable energies would not be enough for the replacement of conventional energies. And this is a big lie. It is a myth."

Scheer calls the switch to renewable energy a revolution. "It's a change in ownership. And it's also a technological revolution which creates a lot of benefits. So it must be calculated totally differently. It's another paradigm of energy economy and this paradigm must be calculated in a way that one has to look at avoided costs which are unavoidable in the conventional energy system. With renewables, you have indigenous energy, you avoid long transmission lines, you avoid environmental damages and the social costs of destruction to the environment. Those costs are not included in your energy bill (for fossil fuels) but society has to pay it."

Scheer believes that if this kind of revolution can happen in Germany, it can happen even faster in Canada given this country's huge natural resources.

"If you look to countries like Canada," says Scheer, "with such a large area of several million square miles, and relatively few people, it would be very very easy to come in a very short run to an energy system only based on renewable energy sources from indigenous sources."

As Scheer points out, Germany has 85-million people compared to Canada's 33-million and an even more industrialized economy.

Pickering Nuclear Station went into service in 1971
(CBC)

Here in Ontario, while the provincial government sees the potential of solar energy and is introducing its own version of "standard offer contracts", it is also proposing to build new nuclear reactors and repair the existing nuclear reactors.

Scheer says he can't understand why the Ontario government is even talking about building nuclear reactors at a time when Germany has begun shutting them down and has legislated a ban on nuclear energy by the year 2021.

"I have heard about new nuclear power plants in Canada," says Scheer. "I think there is no rational argument to do that, if you compare that with the potential of wind, to take only one example of a complementary element to the existing hydro power potential in Canada. The combination of wind and water only could lead in Canada, in the run of very few years, less than 10 years, to an electric power structure only with renewable energies. Totally clean, totally clean." He pauses and revises his forecast. "I think it could be possible in 5 years."

Here in Ontario, the government has set its price for solar energy at 42 cents per kilowatt hour. The government will also offer to buy back wind and biomass energy, but at a much lower price - 11 cents per KW hour. Because solar technology is the most expensive, the premium is intended to kick-start a solar industry. It's a "declining incentive", designed to lure early adopters. The premium price is phased out altogether, when the technology becomes cheap enough so that incentives aren't needed.

Jed Goldberg
(Courtesy Earth Day Canada)

Jed Goldberg is one of those solar pioneers who's willing to invest in the technology now. He's been organizing neighborhoods in Toronto to go solar. The first such effort involved 75 homeowners in an east-end neighborhood who came together to make a bulk purchase of rooftop solar photovoltaic panels. His latest initiative is called WISE, the West Toronto Initiative for Solar Energy.

"The Riverdale group really only took a few months," says Goldberg. "And this was before the standard offer contract was even announced. As soon as the standard offer contract was announced, we decided to go into West Toronto, and in a matter of only a few weeks we already have 200 people who are interested in having solar panels installed on their roof."

The most critical piece of any incentive program, says Goldberg, is making it worthwhile for homeowners to participate. "It's going to ensure that the maximum number of those 200 people will sign contracts." And if that movement spreads across the country, as more citizens take control of their own electricity needs, solar advocates predict it will bring down the cost of solar technology so that it becomes a mainstream option, rather than the purvue of "early adopters".

Goldberg says the other benefit of solar technology is its simplicity. "With solar, there are no moving parts, no pumps. You can just forget about it. It doesn't need maintenance."

But if the average homeowner isn't given the right kind of help to get going - government incentives and attractive financing to get involved in solar energy, Goldberg doesn't expect a revolution. "To be blunt," he says, "the payback is so slow that people will avoid it."