Solar power thrives in Germany as Russia phases out gas

In the first six months of this year, Germany saw a 22 percent jump in solar installations compared to the same period last year, according to data provided to CNN Business by the German Solar Association. This includes residential and commercial use, from small installations on private rooftops to large solar farms, the group says.

For renewable energy companies, this has caused a surge in sales and added strain on supply chains.

Demand for solar energy in Europe’s largest economy was already on the rise as energy prices skyrocketed, political stimulus was introduced and adoption of the technology became more mainstream. But more recently, consumers have also faced even higher utility bills, scorching temperatures and new worries about whether they can keep warm this winter.
For many households, the biggest fear is that the tap will be completely turned off in Russia this winter. The German government has already put in place a crisis management plan that could include rationing for businesses if that happens.

“This [demand] has only intensified with the war against Ukraine that is happening on our doorstep,” David Wedepohl, managing director of the German Solar Association, told CNN Business.

“That’s something that really worries people.”

German officials have responded to the crisis by urging consumers to save energy. Some municipalities have already responded by ditching basic needs such as lighting, showers and heating.

Jim Gordon, CEO of Smartflower, said geopolitical turmoil has also pushed more people to switch to solar. The company produces solar power plants in the shape of a sunflower. to corporate campuses, universities and homes.

“Our business is booming because it’s the perfect storm of converging elements that really kicks up solar power,” Gordon told CNN Business.

“People are concerned about energy security,” he said. “An autocratic dictator can open a gas pipeline and turn off the power, but no one can control the sun.”

Rapid growth in sales

Schneider Electric (SBGSF)The European industrial and energy giant says demand for its solar-powered heating systems in Germany has “nearly doubled” this year compared to the same period in 2021.

According to Konstantin Elstermann, the company’s vice president of homes and distribution, the company’s sustainability division, which advises businesses on clean energy procurement, has also reached an “all-time peak” in consultation requests.

Russia will once again cut off European gas through the Nord Stream 1 gas pipeline

Similarly, Sonnen, a German solar panel supplier, saw its orders “more than double year-over-year” due to “increased commitment to [people] run their homes with renewable energy,” said CEO Oliver Koch.

In a statement to CNN Business, Koch said his team noted “an additional surge in demand since the end of February” when the war began and “constantly expanded our manufacturing capacity to keep up with demand.”

Demand is so strong that Smartflower now expects to quadruple its sales in Germany this year, according to managing director Robert Sawyer.

“In the first six months of 2022, we did more deals in Germany than we did in all of 2021,” Sawyer said, adding that sales in the country have doubled this year.

Smartflower installation.  The solar power plant maker says it has doubled its business in Germany this year, citing higher demand after the invasion of Ukraine.

Supply Chain Obstacles

However, this boom is not without problems.

According to Schneider Electric’s Elstermann, the industry is currently experiencing a severe labor shortage.

“Some electricians are booked three to six months in advance,” he told CNN Business.

“This bottleneck almost surpasses the current shortage of raw materials and production capacity. We know that the supply issues due to the pandemic are temporary, but the shortage of skilled workers remains,” said Elstermann.

Wedepohl said the industry is looking to address the issue. He added that many electricians who have left their jobs over the past decade are “re-entering” the market, while roofers are also called in to help with the installation.

“Many installers are working extra shifts, training people, hiring new ones,” he said. “It’s a challenge, but it’s definitely a moment that we hope we can rise to.”

A question of sustainability

For now, Germany has resorted to starting up its coal-fired power plants to cut down on gas consumption and ensure there is no electricity in the country.

But Chancellor Olaf Scholz has made it clear that the government is unhappy with this.

“It is bitter that now we have to temporarily use some of the power plants that we have already closed due to Russia’s brutal attack on Ukraine. But it won’t be for long,” he said in a post last month.

Similar conversations are taking place all over Europe.

Europe braces for gas crisis as historic heat boosts demand
This year, the UK also announced a shift to other energy sources, including wind and nuclear power. And for some consumers, alternatives to gas heating, such as wood-burning fireplaces, have become more popular.

This month, Austrian climate minister Leonora Gewessler called for more clean energy projects to help the country move away from Russian gas.

“We need to get rid of this dependency – cubic meter for cubic meter, windmill for windmill, photovoltaic installation for photovoltaic installation,” she told CNN’s Sarah Sidner, referring to the units used in the construction of solar and wind power facilities.

“Because we see our dependence on fossil fuels being used as a weapon in war,” Gewessler said.

“Winter is coming,” Wedepoel said, noting that most houses in Germany were heated by gas. “Europeans… are pretty collective about it too.”

—Chris Liakos of CNN and AJ Davis contributed to this report.

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