Questions & Answers

How will Germany ensure that the poor can still afford energy?

In general, Germany can protect the poor by providing jobs with livable wages, which is why one of the main goals of the Energiewende is to gear up German industry for future technologies. Furthermore, the cost of electricity has risen more slowly than the cost of motor fuel and heating oil over the past decade.

The Energiewende is an answer to unpredictably fluctuating energy prices, not the cause of higher prices over the long run. The price of conventional energy is expected to go in only one direction: up. Since 2000, the cost of hard coal has more than doubled in Germany, while the cost of natural gas has nearly tripled.

What is more, the retail price of electricity only increased by three percent in 2013, fairly close to the general inflation rate of two percent in Germany. Since then, retail rates have remained within the inflation rate.

In contrast, the cost of renewable energy is expected to continue to drop or at least level out, depending on the specific technology. The cost of photovoltaics fell by 50 percent from 2010 to 2015, and the US Department of Energy's Transparent Cost Database shows that onshore wind power is already roughly on par with natural gas, coal power, and nuclear. Germany's Fraunhofer Institute for Solar Energy Systems estimates that solar power in the country will cost the same as coal power roughly by the end of this decade – even in cloudy Germany.

Concern about energy poverty is increasing, although there are no clear definitions on what the term actually means. In recent years, some 330,000 German households have had their power cut off annually because of outstanding electricity bills, yet power was generally restored within a few days.

Unfortunately, reports on the number of households without electricity rarely compare Germany with other countries. It turns out that Germany performs quite well in this respect; comparisons of "energy poverty" regularly place Germany above the EU average. One reason may be that Germany combats poverty, not just energy poverty; for instance, in 2015, a minimum wage of 8.5 euros was introduced. Since 2009, Germany has been a leader in keeping energy poverty down in Europe.

Energy audits are already offered to poor households in order to reduce unnecessary energy consumption. At the same time, it should be kept in mind that even low-income homes spend less than ten percent of their income on energy. It is therefore crucial that poverty itself be addressed directly with proper social policy, retirement plans, and wages. Clean power will also help mitigate global warming, which will affect poor countries inordinately. In other words, Germany's commitment to renewables will also help poor countries.