There has been debate over whether the cost of using renewable energy sources is too high. According to a March 23 article from USA Today, people in Germany will have to pay 11% more for their electricity in 2013 compared to 2012 because of the government's subsidy programs for renewable energy. For countries that have financial difficulties, finding money to fund renewable energy programs may be less important than finding the money to pay for public benefits or infrastructure construction.
Countries hope to increase solar installations to reduce reliance on generating electricity using coal or nuclear, and to reduce carbon emissions. Big carbon emitter countries, such as China, have introduced solar subsidy programs in hope to stimulate installations. However, what if carbon emissions fall in a country not because of increasing solar installation, but because of a slower economy? What will happen to solar demand in that country?
According to a report by Bloomberg Business on March 28, Europe's carbon emission market is crashing. The European Union Emissions Trading System is the biggest carbon market in the world, according to the report, and the price tag of a ton of carbon emission has dropped from EUR31 (US$40) since the beginning of the trading system to EUR4.15/ton on March 22, 2013, said the report. The falling prices of carbon emissions are due to a slower economy causing lower emissions.
This means firms no longer need to buy carbon emission permits. This is good news for the world as the air is fresher and global warming may ease a little. But with lower carbon emissions, the motivation for people to install and switch to solar power is weak. If people can maintain the current lifestyle without making changes, people will be reluctant to change.
According to IHS, a market research firm, solar demand in Europe is likely to account for 32% of the global market in 2013, a significant drop from 57% in 2012.