Economic Impacts from the Promotion of Renewable Energy Technologies: The German Experience

by Manuel Frondel, Nolan Ritter, Christoph M. Schmidt and Colin Vance

- Germany’s experience with renewable energy promotion is often cited as a model to be replicated elsewhere. This paper critically reviews the current centerpiece of this effort, the Renewable Energy Sources Act (EEG). We argue that German renewable energy policy, and in particular the adopted feed-in tariff scheme, has failed to harness the market incentives needed to ensure a viable and cost-effective introduction of renewable energies into the country’s energy portfolio.

Frondel, M., N. Ritter, C.M. Schmidt and C. Vance (2009). "Economic Impacts from the Promotion of Renewable Energy Technologies: The German Experience." Ruhr Economic Papers #156, Dec 2009.