There's a solar revolution going on and Germany is leading it - switching to solar energy faster than any other country in Europe. Energy experts estimate that in 40 years, Germany - one of the most industrialized countries in the world - will be entirely powered by clean energy. It seems like a miracle. But there is an explanation - it's called "standard offer contracts" - an agreement by the government to buy solar power from individuals. It's helped kick-start a solar revolution in Germany, along with a revolution in power distribution. The key to it is a 20-year contract.
In Germany, if you produce solar power on your rooftop the government will buy it back from you at 62 cents a kilowatt hour. Here in Ontario, a similar program will be launched this fall. Homeowners who want to invest in solar technology can take those 20-year contracts to the bank. The contracts provide financial institutions with a government guarantee that the borrower will receive income from his investment. Standard offer contracts, or "feed-in tariffs", as they're called in Europe, have turned Germany into a world leader in solar energy. Many other countries such as India, Portugal, Japan, Spain and Denmark have some form of these incentive programs for feeding electricity generated from renewable energy into the grid. The market development stimulated by this - initially in the wind energy sector - created jobs for over 20,000 people in Germany and 15,000 in Denmark. As a result of the associated economies of scale and competition among manufacturers of windmills, production costs have been reduced by 50% since 1991, and demand is growing around the world, stimulated by the improved technology.