A Tale of Three Markets: Comparing the Solar and Wind Deployment Experiences of California, Texas, and Germany


Publish Date:
November 17, 2015
Steyer-Taylor Center for Energy Policy and Finance
Working Paper
  • Felix Mormann, Dan Reicher and Victor Hanna, A Tale of Three Markets: Comparing the Solar and Wind Deployment Experiences of California, Texas, and Germany, Steyer-Taylor Center for Energy Policy and Finance, November 17, 2015.
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The Obama administration has repeatedly identified the large-scale build-out of clean, renewable energy infrastructure as a key priority of the United States. The President’s calls for a cleaner energy economy are often accompanied by references to other industrialized countries such as Germany, the world’s 4th largest economy, hailed by many as a leader in renewable energy deployment and proof of concept. Indeed, the share of renewables in Germany’s electricity generation mix (28%) is twice that of the United States (14%), and the ambitious “Energiewende” commits the country to meeting 80% of its electricity needs with renewables by 2050. The German renewables experience, however, is not without its critics. Some praise the country’s “healthy Feed-in Tariff ” and the resulting “proliferation of solar systems” while applauding the German electrical grid as “very reliable and able to withstand high penetration of variable generation.” Others consider it “clear that the transformation, if plausible, will be wrenching” as “German families are being hit by rapidly increasing electricity rates” and “businesses are more and more worried that their energy costs will put them at a disadvantage to competitors in nations with lower energy costs.” The mixed response to Germany’s commitment to solar, wind, and other renewables raises questions as to how much and what, if anything, the United States can learn from Germany’s renewable energy experiment – and vice versa. This paper seeks to answer some of these questions by comparing the German renewables experience to that of California and Texas, two leaders in renewable energy deployment in the United States and globally, albeit with very different policy approaches and political leadership. California, the 8th largest economy in the world, and Texas, the 12th, have had significant success in large-scale renewables but not without their own challenges. Our comparison of the renewable energy paths taken by what amount to three large and highly distinct “countries” elucidates some of the most prominent (and controversial) themes in the transatlantic renewables debate, including electricity costs, policy design, output intermittency, grid stability, and soft costs. We offer comparative insights and best practices regarding renewables to inform policy deliberations from the upcoming Paris climate talks to EPA’s pending Clean Power Plan to the next generation of Renewable Portfolio Standards at the U.S. state level.