The miraculous “cheapening” of Belgian solar power

Today came the news that the decision was made to stop subsidies on solar panels in Belgium. The discontinuation of subsidies from February 1 applies to all individuals who placed solar panels on the roof of their house after January 1, 2014. I thought there would come a wave of protest of the green technology companies like they did in 2012 and 2013. Yet, surprising, no such thing happened… On the contrary, Agoria (association of the technology industry) even applauded the decision.

It is brought like this: until now the solar panels were very expensive and the government helped a hand so people would install the expensive solution on their roofs. Now solar panels are dirt cheap and with a better performance, subsidies are not needed anymore. Alex Polfliet, President of PV Vlaanderen (the PV industry association in Flanders) even triumphantly stated (translated from Dutch):

The decision proves that today you have cheaper energy from solar panels than from the conventional electricity grid.

Hoooooray! A green miracle has come to us!

But solar energy was only a year ago BY FAR the most expensive form of generating electricity. The same PV Vlaanderen, that now applaud the cut of the subsidies, only a year ago protested loudly against just a LOWERING of the subsidies, because this would make solar panels not competitive with other sources of energy generation. Their petition is still online and active. Yet, now suddenly the price would have dropped so low that NO subsidies would be needed anymore and solar panels would not only be cost effective without these subsidies, but even profitable!!!

Something is not right here.

Why didn’t other countries find this also? Many countries went back to coal and even lignite to lower energy cost. Why don’t they think about solar in order to lower electricity prices? Why do these organizations, previously completely against the cutback of the subsidies, now suddenly agree, even applaud it?!?!

Then I went to the Agoria website to read what they had written. This is the part that struck me (translated from Dutch):

It is not entirely true that all subsidies disappear. Owners of residential solar panels do not pay a grid allowance while they use the grid constantly to store when production exceeds their consumption. This is a substantial subsidy.

Focus on innovation subsidies
This “subsidy” which actually amounts to a “free storage / battery” has the side effect that consumers will not be looking for solutions to invest in energy storage technology itself or in shifting their energy demand. This will not be good for innovation in energy storage and energy management systems. However, breakthroughs in this area is crucial for a further transition to CO2-free electricity. Agoria therefore requires the Flemish government to quickly draw a modern subsidy policy that fosters innovation in energy storage and management.

Aha, that makes sense. There is still a subsidy, it is only called something else. Even more, Agoria demands new subsidies for solar power in the near future!

These are more hidden subsidies. Because intermittent renewables tend to disrupt the electricity grid, extra measures need to be installed to balance it. Like more peak shavers, backup capacity, extra adaptations to the grid,.. Payed by the government, so by the tax payer.

That is something completely different than was communicated to the public via the media. But I agree, the word “subsidy” is not used anymore. But that doesn’t mean it suddenly is more cost effective than before.


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