Follow the Sun! How Investments in Solar Power Plants in Sicily can Generate High Returns of Investments and Help to Prevent Global Warming

Abstract

Germany could have reached obligations set by the Kyoto protocol earlier if German solar investments had been relocated to Sicily. Under the protocol, additional benefits of emission savings and energy production should rise to 72%. However in 2008, German solar power plants only accounted for 20% of the financial benefits through support mechanisms such as EEG for renewable energies, while the share of green energy produced was no more than 4.8%. Although from an economic point of view the system seems absurd; it is adopted by many other countries. This paper will firstly underline the importance of renewable energies being financially supported and why policy makers can justify subsidies for selected technologies through social costs affected by carbon exhaust. The second point is that place does in fact matter and physics sets the limit: the chosen approach for expected final yield shrinks the additional benefits of the theoretical relocated south solar investments to +37%. In closing, the conclusions provide political recommendations for the design of further subsidies of solar energies in Europe.