Preaching climate protection - taxing solar power
The Federal Government has come up, on a proposal of the Ministry of Finance, with a new chicane: self-generated solar electricity is to be taxed. This is how it should work: the operator of a solar system measures the power produced by its solar system and that he has used in his building. If the plant has produced more than 20 MWh (corresponding to 20,000 kWh or the consumption of 6 average households), the solar power generator has to pay a solar tax of 2.05 cents per kilowatt hour to the tax authorities for the total privately consumed electricity – and not just for the consumption above that 20 MWh threshold. This proposed tax corresponds to the amount of the electricity tax payed by all residential and commercial customers on electricity coming from fossil fuel and nuclear power plants – although it is well known that big electricity consuming industrial customers are exempt from this electricity tax.
The electricity tax was originally introduced in the wake of the electricity market’s liberalization. It was supposed to incentivize consumers to save electricity and to give a market price (though too low) to the environmental pollution caused by fossil power generation. The additional tax revenue was to be used to lower pension contributions.
17 years later Finance Minister Schäuble seems to have forgotten what the electricity tax was intended for. This memory loss is a heavy burden, as it is not foreseeable how the commitments that were made at the Paris Conference on Climate Change are to be achieved in Germany. After all, Germany has to reduce its greenhouse gases to almost zero by 2050. This can only succeed if the solar energy is making a greater contribution.
The proposal is also a proof of incompetence in terms of industrial policy. The construction of new solar systems has nearly come to a standstill in the last two years: while about 8,000 megawatts of solar power were still being newly installed in 2012, it was only around 1,000 megawatts in the year 2015. The expansion has thus declined by about 85 percent. Meanwhile, most solar companies have either gone bankrupt or fled abroad. With the amended Renewable Energy Act in 2014, the Federal Government itself has set the expanding corridor for solar energy to an annual contribution of 2400-2600 MW. Thus, although the actual expansion is lagging miles behind the set targets, the Ministry of Finance is once more worsening the economic framework conditions for solar energy. This will mainly affect commercial systems of 20 kW and up, as well as cooperative solar systems on top of big apartment houses. That is not all. The solar tax doesn’t only apply to new installations, but also to already existing systems.
It is strange: everyone knows that the vehicles’ official diesel and gasoline consumption data are not correct and that the real fuel consumption exceeds them by as much as 40 percent in some cases. This is not just a nasty deception of the buyers. It also leads to tax losses for the Federal Government, as the vehicle taxation is calculated, inter alia, based on the fake consumption declarations of the vehicle manufacturers.
While the Ministry of Finance and the government turn a blind eye to the car manufacturers and therefore cause the climate a lot of damage on the one hand and renounce to additional revenues in the billions on the other hand, they try to squeeze every last cent out of the already ailing solar energy that should be used as an important component of climate protection.
In the US, the coming presidential candidate Donald Trump has just announced that if he was elected he would not sign the climate treaty of Paris. There, the Americans at least know what they vote for with him.
For us it is different: climate change, and the recognition that we have to do something about it, is undisputed. Politicians pose with endangered polar bears and give visionary speeches on climate conferences. And what do we get? State promotion of electric placebos on four wheels and taxes on solar power. We just need a mandatory logbook for bicycles, so that the Treasury can use the cyclists’ kilometres for budget financing - then the new energy and transport revolution will be completed.
Even if the Ministry of Finance should not prevail with its proposal, the damage is already done: investors and voters have already been unsettled.