Market Analysis

Market Analysis April 2019 - Fridays Forever

Since the last reduction in the feed-in tariff for medium-sized PV systems at the beginning of April, not much has changed in terms of module prices. This is down to unchanged demand in Germany - at least in the first days of April. What is more, any local lags in the market are outweighed by steadily rising demand throughout Europe. It seems that the daily reports across all media about climate change and school strikes, which in sheer volume are in a head-to-head run-off with reports about the Brexit mess, have led some people to rethink after all. Meanwhile, privately people are approaching me on the subject of installing PV systems, people from whom until recently I would not have expected such activism. So, what is happening right now in our society?

For weeks, schoolchildren and students all over the world have been taking to the streets on Fridays to protest against the inaction of policy makers - no, they are calling out their parents' and grandparents' whole generations. Young people no longer want to accept the frivolous endangerment of their futures - or to be more precise, their livelihoods - on this planet. The endangerment is not only frivolous but ignorant, since the facts about the causes and effects of the ongoing destruction of the environment have been known for decades but beyond high-minded declarations, no one has really taken any decisive action in the right direction. Carbon emissions and the resulting rise in atmospheric temperatures, the littering of the world's oceans, the extinction of species - it all continues unabated, but urgently needed steps are either not being taken at all or not to a sufficient extent.

What Greta Thunberg began with her "Skolstrejk För Klimatet" in August 2018, which the global public then became aware of after her impressive speech at the UN climate conference in Katowice, Poland, in December, has now grown into a massive global protest movement. Many parents, scientists and other social groups have latched on to this movement, which now operates internationally under the name "Fridays For Future (FFF)". Even former US President Barack Obama recently praised the young people's commitment during his visit to Berlin, albeit with a typical appeal to moderation: "When I was a young activist, I always wanted one hundred percent success"; but, he continued, it turned out that this was not possible, and that compromise was the main thing in a democratic and open society.

This may be the right approach, but if the negotiated compromise is to be anything other than a lazy or minimal compromise, then the negotiations have to start with radical or outrageous demands. So-called "realistic" demands of one side in combination with egoistic or even inflated demands on the other side invariably lead to negotiation results with which the other side can often live very comfortably, since in the end it hardly has to make any concessions. In business, this is a matter of course for any reasonably good negotiator. To that extent, it is entirely reasonable and welcome that the FFF movement is now making highly ambitious demands on politics and society that go far beyond what is discussed in more conservative circles.

This is the students' reaction to the criticism that their protests lack substance as long as they fail to formulate demands or solutions. This has changed since the beginning of April and a package of measures is now on the table. The starting point is to limit global warming to 1.5 degrees, which is now a broad consensus. From this, the students now deduce that Germany must bring its CO2 emissions to zero net by 2035 and completely shift its energy supply to renewable sources. The coal phase-out should be completed by 2030. A quarter of the country's power plants would have to be taken off the grid by this year. In addition, the climate protectors demand that all subsidies for fossil fuels be abolished by the end of the year. Moreover, all greenhouse gas emissions would be taxed at 180 euros per ton of CO2. It is also high time to abandon the absurd 52-gigawatt cap for photovoltaic incentives under the German EEG.

Of course, there was a prompt outcry from both conservative and liberal parties as well as the industry associations. The demands were called completely unrealistic, there were still no viable alternatives and Germany's status as a business location would be endangered - the same old saw. But Germany's future is in danger anyway, if the ruling parties and major corporations do not change course soon, making a rapid switch to low-emission power generation and electro mobility and other forward-looking technologies in the age of digitalization. Instead, they stir up fear of the economic supremacy of China, a country already much more advanced in all these areas and presumably striving for world domination.

In this respect, it is a good thing if we now push for more ambitious steps, a whole generation goes on strike and is uncomfortable until something finally moves forward. The easy road and conformity were yesterday. The young generation seems to have understood that prosperity at the expense of one's own future is not a real option and certainly not a desirable one. Occasionally, the demonstrators' banners and cardboard signs also contain criticism of capitalism, the demand for a systemic shift. Consumption and a society based on having fun do not seem to be as popular with them as we "old schoolers" once thought. Is there hope after all? And what conclusions can we "old folks" draw from this social development?

Well, why not support the protests and put our full weight behind them! Let's motivate our children and young family members who have not yet become active to join the FFF movement. We can also offer more solutions in the form of new, interesting and forward-looking business models, products and approaches - Obama is also doing this through his newly established foundation and his public appearances. Greta will certainly not end her school strike yet, even though she claimed otherwise on April 1 on the social networks - fortunately, it was only a successful April fool's joke. A premature abandonment would mean surrender to the incompetence of their parents' generation and a betrayal of their own future.

But why do we adults find it so hard to change our behavior? Why does politics find it so difficult to set a course in the right direction?

Most people who have done nothing or far too little about climate change to date will not experience the most drastic consequences themselves. There is therefore little incentive in our egomaniacal and narcissistic society to move out of our much-loved comfort zone. Our children, however, will suffer terribly, one day wondering if what they learned in school or vocational training will help them to develop adequate survival strategies. Some of the students who protest now may never go to school again on a Friday, because their education will be over before the school strikes end! The protests are generally still peaceful, but they could soon become more radical and violent to attract greater attention and put even more pressure on the public, business and politicians.
School's out on Friday! Is school out forever?

Overview of the price points by technology in April 2019 including the changes over the previous month (as of April 11, 2019):

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