Revisiting Germany's solar cell promotion: An unfolding disaster

This article revisits an analysis by Frondel et al. (2008) on the promotion of photovoltaics (PV) in Germany, a technology that enjoys particularly high subsidies in the form of feed-in tariffs. The result is explosive costs with little to show for either environmental or employment benefits. Indeed, we document that the immense costs foreseen by Frondel and colleagues have materialized: our updated estimate of the subsidies for PV, at € 108 Bn, even exceeds their expectations. Moreover, with installed PV capacities growing at a rapid rate, these costs will continue to accumulate, diverting resources from more cost-effective climate protection instruments.