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  • Writer's pictureThe Solar Journey

Episode #002 - Stefan Krauter

Episode #002 with Torsten Brammer & Stefan Krauter:

Stefan Krauter is a serial entrepreneur and professor. In the 1970s, while his friends went onto demonstration against nuclear power plants, he searched for something he could support. This is when solar power caught his interest and he has not left the solar industry ever since.

He is a co-founder of the first publicly listed solar module producer Solon and co-founder of the technical advisor PI Berlin. On Twitter, he tries to compete with Trump by using a job title usually limited to the CEO of the catholic church. Officially, he claims that a former student gave him the title “solar-pope” (@solarpapst).

You can tell that his agenda is on eye level with the mayor of the Vatican when he discusses the pros of his new concept of measuring time (spoiler: it is related to tobacco).

Currently, he is a professor at the German University of Paderborn. He researches, all down-to-earth but always with-the-sun, innovative energy supply structures, energy efficiency, and load management.

Show Notes:

(Interesting points covered in this episode for those of us on our own Solar Journey):

  • Why is tobacco the centerfold of Stefan's new concept for time?

  • Why did Stefan end up in the solar industry?

  • What is Stefan's major advice for founders?

  • Why was the German feed-in tariff from the year 2000 THE major global milestone for the solar industry?

  • Why is German national security the mother of the modern solar industry?

  • How did Germany lose its pole position of 50% market share in solar to China?

  • Why is nuclear power 100 times more expensive than solar and coal?

  • What are the biggest roadblocks for solar and wind?

  • What can solar learn from Russian nuclear power plant giant Rosatom?

  • Why should solar join forces with worker unions?


[0:05] Host: Alright, thanks again for joining the show, The Solar Journey.

Host: Today we have a new guest, Stefan Krauter. Hello Stefan.

Guest: Hello!

Host: Hi.

Guest: How are you?

Host: Thanks for joining.

Host: Let me just start with outlining your CV, which is actually quite impressive. And it’s going to take a take a little while. But it was too hard to cut out things because I think it all adds to the personality, who you are.

Host: So you studied Electrical Engineering a long time ago.

Guest: (intelligible)

Host: Speaking, I guess. And you’ve got a PhD on Solar Modules in 1993. And then you are actually a co-founder of Solon, which became the first publically-traded solar company in Germany in 1998.

[0:57] Host: And the very same year, you became the professor at Technical University of Berlin, the capital of Germany. And again, the very same year you went to Brazil to work as a university professor in Rio de Janeiro. And that is already pretty impressive, enough to retire I would say. But it seems that you just got started. Because only 1 year later you founded another company, Riosolar Ltd, which installed solar modules in Brazil.

Host: And again, being a professor and running a company is way too boring. This is why you must have started to organize 7 world climate and energy conferences called RIO.

Guest: The number of the year is 2002, it was the first one.

[2:00] Host: Yeah. The motivation I think was to keep alive the spirit of the 1992 United Nations Rio Conference on Environment.

Guest: Exactly.

Host: Sorry?

Guest: Exactly.

Host: Yeah, so big effort here on your part. And still not enough. You founded a public university for sustainability and energy in Fortaleza in Brazil. And after many years in Brazil you went back to Germany. In 2005 you became a professor for solar energy at the Technical University in Berlin, one of the most well-known universities in Germany. And it just keeps going. You founded another company in 2006; it’s called PI-Berlin. It’s a company still active globally. It’s a company specialized in quality audits for solar cell and solar module factories and solar parks worldwide.

[3:00] Host: It’s one of the top companies in that sector, I would say, globally. And right now you are professor for sustainable energy systems in Germany. You’re also very active on Twitter. Where you call yourself @solarpapst. Everybody who wants to follow you who wants to know all about… just go on Twitter and search for @solarpapst. Solarpapst that’s German and it means Solar Pope.

Guest: It wasn’t a name I invented, but it was from a student of mine who was calling me like that. And then this was available on Twitter and so I took this. But I wouldn’t dare to get myself this name. So it was just embarrassing…

Host: Do you run into trouble with that kind of name? Or everybody got used to it.

Guest: Ah yeah, sometimes. Sometimes. There was. But ít’s more easy to remember rather than stuff like Krauter or people don’t know that Stefan with ph or with f and Krauter…which is the right form.

[4:05] Guest: So I think for people it’s more easy to remember, so I kept the name. I have also another Twitter account with my real name, but it’s actually less active. More people like to use something from @solarpapst rather than from Stefan Krauter.

Host: Right, then you better stick to @solarpapst, solar pope.

Host: Yeah so you did a lot of amazing things. Well, you’ve got a big name. You’ve even proposed once, that was after a few beers or wine, even a new metric for time.

Guest: Not much (intelligible) to that I guess. (Intelligible) in the conference.

Host: If I remember correctly it was not related to the (intelligible) but rather to the burning red of tobacco. How did that come into place? Why did you come up with that?

[5:00] Guest: Because the testing institute they got a lot of tests which take 1000 hours. It’s really hard to really check out when will the test be ready after thousand hours. So its 1 and a half month, and have to check the date, and each day only has 24 hours. Also, I got some problems with the schedules of trains and planes, because some of them started to boarding was set at a certain date at 20. Another flight was at a certain date at 0.5 until 5 minutes until midnight and boarding was at 23 so I came at the same day at half an hour before midnight but the plane was already gone. And the one thought was “Why always has start the day at midnight?” In middle ages it was okay because it was the middle of the night, and nowadays there’s still a lot of activities. So first idea was to get the reference point, to shift from midnight to maybe 3 o’clock in the morning.

[6:00] Guest: So this is really a time where everyone is tired and so it fits better into the actual nature.

Host: Less activity…

Guest: And then the other idea was just this 1 hour. 1 hour is a little bit unusually cannot do well. Its either too long to wait for 1 hour. It’s really a few. If you miss 1 ICE train and the next one is coming in 1 hour its, not enough to go eating or to go shopping because it’s little bit but it’s always too long to wait until one. This is not really human adequate time, one time interval, that’s it.

Host: Yeah.

Guest: Got the idea just many people say okay, let’s smoke a cigarette, takes about 7 minutes. And the one, and then we say okay 7 minutes. It’s quite good. If you missed U-Bahn or a bus 7 minutes is okay.

[7:00] Guest: And then if you divide this into 24 hours its 100 time frames during 1 day and this was a bit too rough to make a schedule so we take out the idea to be scientific to where 1000 timeframes during 1 day…

Host: Yeah.

Guest: And then it would be 0.7 minutes or so and this is really enough for planning everything and also its more easy if you add up. So if you say okay I’ll meet you in 500 so that’s the middle from 3’oclock to 12 hours more. If you get used to it, of course you have to get used to it.

Host: Yeah.

Guest: And then I did some research, and I found out that Napoleon was suggesting this also. But it got a bit stuck because he got some problems with the church and they didn’t like this because they weren’t proud of their…

Host: But you can fix this because you’re the pope now right. Since you’re the pope you can fix that.

Guest: Yeah…

Host: The idea and the pope right, yeah.

[08:00] Guest: So what do you think right, so you remember that.

Host: Definitely, definitely.

Guest: I feel like there was something like this, together we saw a friend down in (intelligible).

Host: Yep, yeah. Maybe… I can’t remember some PV conference in Paris.

Guest: Maybe because it’s also more easy to add up. So if you say okay, we add up some timeframes you don’t have to think about. So if 2000 means 2 days, 3000 means 3 days. It’s much more easy to. Even a year is 365,000. So we can remember it much better, other date is you always have to look at the calendar. Its months… 28 day, 29 day, 30 day, 31 days, and so its really…

Host: Yeah.

Guest: In business, people stopped all this as regular schedule. They started to make weeks in order to make it more transparent. Which when they do something and our system would be even more transparent.

[9:00] Guest: While we have not only the dates but also the- date would be also just we countdown the months and if you really want to relate to the Moon. Actually. We have 13 moon phases not 12 moon phases.

Host: Yeah.

Guest: And this was forbidden by the pope -

Host: Again?

Guest: - Because he thought that 13 is not a Christian number or not a good number. It has to be 12. And therefore we have this Julian calendar, which has this disorder number of days per month. And counting and it doesn't fit to the moon phase at all.

Host: All right. Yeah, so that puts lots of opportunities with as you being the pope on Twitter. Maybe you can find some followers for revolutionizing our time system-

Guest: I don't know but keep a very calm mind and erase all progress...

Host: You focus more on solar. Yeah and your CV says you're totally dedicated to solo. Why is that and how did you get started? And why do you keep working in that sector?

[10:02] Guest: It started already quite early, but I was 16 and there was a big anti-nuclear movement and so on, and I had some friends there. But people were just thinking about anti-nuclear. And they was asking me also during that time about what shots should substitute nuclear, what is a clean way to produce energy. And it was completely exotic during that time. So it was the late 70s. And then I wanted to study a little bit, but there was nothing available. And the electrical engineering seems to be the closest on that. And then I have. But when I was doing my thesis there, my master's thesis, EASI considered photovoltaic energy. That's some strange energy production. I think it's only suitable for spacecrafts. And you are electric engineer. You should have studied then a spacecraft technology or something like this.

[11:02] Guest: And so I couldn't really make my diploma. It was called the Masters. There was something equivalent to the Masters and it wasn't possible to do that. And there was only one old lecture was one course in solar energy. Mr. Either he was called, don't know whether he's still alive. And it was in the early 80s and then the second step I got the opportunity for [intelligible] at the technical university Berlin to go more into depth on renewable energy, basically on photovoltaics.

Host: Yeah.

Guest: Well enormously expensive during your time. So it was about one kilowatt hour was more than two marks. So was it one euro per kilowatt hour? And about steel, I better hope that it's getting cheaper and which was actually too low. It was. It got very much cheaper to nowadays. And if you see the latest development, I think was by reading a tender from Qatar, where they offered one kilowatt hours of solar electricity for one point four euro cent per kilowatt hour.

[12:05] Guest: So it's almost 100 times cheaper than it has been before.

Host: Yeah, it's a wonderful development. And you work in the academic sector, but you also founded a few companies, as I outlined in the beginning.

Guest: First it was only possible in the academic sector because there was no commercial use besides spacecraft or something of photovoltaics. So this was and then in the end, I got some studio asking me, yes, it's very interesting what you do, and especially in Brazil. So I have a farm and my father wants to produce energy and what is off grid systems. You just feel the opportunity just to have a gasoline generator and which consumes a lot of gasoline, but also needs a lot of maintenance. And a lifetime is relatively short. So therefore, they will take also ready became competitive.

[13:00] Guest: And therefore the students are asking me several of, for example, whether we can find a company to install it and to import the stuff. Still a big problem in Brazil to import stuff because Brazil thinks they can do everything on their own. And even solar factory. But first, you have to create a market and you just have to have some imported products.

Host: Yeah.

Guest: Those are some difficulties. At the end, we started to make some simple exemplary projects. So we, with every project, we try to something you kind of hybrid systems. There's also some farms and so on. They have a kind of good connections, but very weak grid connections are often electricity, sometimes they are, sometimes not. And so they have to have an intermediate operation of the IPB system. So we have to put the PB into a mode that we have often on grid systems. And for example, this wasn't possible because there were no inverters which can do off grid and on grids, the same inverter.

[14:00] Guest: So you had to buy two inverters because only one or two companies in the world which really are able to do that. But this have been enormously expensive. And so we just tried to see something and see where the link in the market has been. And this was also been promoted in these conferences so it was just a choice between academics, the industry and the population and politicians to see really where to go, because sometimes they don't listen a lot to each other. So they have all kinds of different ideas how to do this. And with this Congress, as we try to find a common platform for them, just for the industry to present their products or for the consumer to see what's available and ask them and ask you what's missing and to give the guidelines to the politicians what has to be done. And this turned out by it, quite good. [15:00] The end, because, one of my students is Kissell. He was just planned to stay for a practicum in Brazil, but then he got married. And days now since the friend of USAir and he has been working at the TTD set and they made this legislation on Brazil. This is very favorable, which is a true net metering legislation. It means you can generate one kilowatt hour of solar electricity, feed it into the grid, and you get the same price you pay for your electricity you get from the grid. So it's just a real one by one value of your solar electricity. This makes it very easy to calculate. And also it's automatically inflation compensated because if there is inflation, electricity price goes up. So does goes your feeding rate…

Host: Or the value of the reduced kilowatt hours also goes up.

Guest: Yes, yes. Yes. And that's much more favorable than the actual German fixed rate to keep us good in the beginning because you get a higher rate than you paid for, but now it's vice versa.

[16:02] Guest: You can produce solar electricity for nine cents and you get 10 cents. But actually, you pay about 30 cents per kilowatt hour from the grid. And that's quite a lot. It's really not just because it's electricity. Okay, it's not always permanently available, but it's one kilowatt hour, its electricity. Why you should get three times less than you produce. And this legislation was took off in Brazil and left already. But due to the efforts of Johannes Kissell, this was successful at the end.

Host: And this is still in place in Brazil?

Guest: I guess there's Johannes Kisell. Meanwhile, last year or two years, one in half a year ago, he went to Bolivia, also he set with a similar approach that to implement the net metering. So the opponents are saying, okay, you don't pay the same thing for your grids and they want to have some grids, texts. So it's not completely true. One by one tariff, but still quite favorable.

[17:02] Guest: So you don't pay a lot for the use of the grid.

Host: Yeah.

Guest: I have to admit to on the other side that in Brazil it's very favorable because there's a lot of sunshine. People use a lot of air conditioning. And so it fits very well to the consumption curve.

Host: All right. You get a metering between production and consumption.

Guest: We don't have a lot of you have most consumption venture as it is the other way around. If most consumption in summer and most consumption during midday and the afternoon.

Host: Yeah, so. So in Brazil, the system is still in place. If I understand you correctly.

Guest: The system, yes, it's still in place with some variations. But it's almost one by one. Territorial integrity there end to end.

Host: But early before you went to Brazil, you founded Solon, right? As the first publicly traded solar company. How did that… How did that happen? How did you guys all meet? There's quite a number of listeners.

[18:04] Guest: Quite a funny story. I was together sitting with my professor reported on it in Berlin, discussing my PhD thesis and so on. I know it was all ready, I think, it was first stage habilitation at the time or it was the second stage habilitation. The thing I have to think in order to get a university lecturer, you have to have a kind of second PhD in Germany. And it only happens in I think a handful of countries like Switzerland, Austria and France has this kind of things. Habilitation is a real translation for that, even in English. So we are sitting together and then some people came and say, okay, I heard during a time you wanted to found a solar center, which is a kind of mixture between a research center and a just a public exhibition. And just to make solar energy more popular. And in Germany or in Berlin, specifically.

[19:00] Guest: (Unintelligible) was not present at the time. (Unintelligible) And so they approached us and coming to this meeting, which was also habilitation and then about the solar center and they asked when it's ready, you want to build a solar factory there. And then they don't know that it will take a long time, but the solar factory sounds interesting. What technology are using and so on. And they didn't have any clue. So (Unintelligible) was basically working on wind and been monitoring, power monitoring and it was importing coffee from Nicaragua. And so they know we are just open to that. And when I was first time in Brazil in 1994, I met Cal Guno there was realer into the solar cell technology. I just said, oh, I came to Brazil recently and he didn't have a lot to do and I said I could put you in touch with him and he can help you.

[20:00] Guest: What technology use and how you to set up a really factory on that? I finally turned out to be only a model factory. But anyway, it was quite helpful to put some technicians and also I participated. But the problem was to decide because then I got a call from Brazil, but they have a nice, well paid five years contract in Brazil. Also, my met my future wife there and I couldn't really decide then between Solon but I decided finally. But it was quite a hard decision whether to stay in Solon or on this professorship in Brazil. Lastly, my PhD, (unintelligible) said come on. This is not lucrative. This solar energy in Germany, it never would be too lucrative. I’m not sure about that.

[21:00] Guest: But the professorship is something more at least for five years of us, but quite stable income and so on. And because this was not true with Solon (unintelligible). It's mineshafts. So it just kind of a kind of club to where we meet each other, an exchange idea, and then both idea about to get money. And these was quite hard to get that money you got that you'll just make a shareholder funding company and the business will be all at all other more kind of alternative way of thinking. So. So shareholding companies was real pure capitalism and was really not so well seen. But at the end, it's actually a quite a good idea if you want to attract money quickly so you don't have to have new contracts, you can just sell the share side shares very quickly without making you a social contract and so on, which is usually the case if you sell shares of company and so on, your food to the register and so on.

[22:06] Guest: So this wasn't necessary.

Host: So Solon and Brazil.

Guest: Yeah I went to Brazil at the end. So this was the story then and I think 1998, 1999 was in Brazil then and I don't know what if I could be together as a whole. Together we founded the Photovoltaic Institute after he founded Cue's Else. I think the opening of was or while it was the biggest. A solar cell produces in the world. But then he left accucells because it got boring for him because he was just a IP systems and only controllers there. And there was not really a room for innovation. And then he called me once. I think we was in Hawaii or something like kind of conference and we had a long talk and then we got the idea to make our kind of engineering office in Berlin.

[23:05] Guest: But lately it turned out to be a quality office. And then some other demand. And Mr. (unintelligible) joined us. And Mr. (unintelligible), then in the end it was made to them subsidiaries in China first and then now United States. And so we've got really a big, big thing.

Host: And it still is. Right.

Guest: Yes it still is. You can look up wwpi/ Unfortunately due to my university work, I cannot participate, but it still exists a lot in my company.

Host: So you founded three companies, at least the ones I know of. Solon. PI-Berlin AG. And Riosolar. So I'm sure that also many potential founders are listening to this podcast and looking at people looking for opportunities in solar. So what advice would you give them when you start a new company, as you've done so many times?

[24:03] Guest: First, you have to start to understand your product. So you have to really understand what you're doing and where's the market. And usually you underestimate and you say, OK, there's a profit margin. Maybe this can make it 30 percent cheaper. But sometimes that's not enough because you underestimate that there's a fixed costs which in office and salaries and so on. And also some delays, for example, Brazil. We got a lot of problems as customs to import stuff. So it has to be, you got to get a certification to get into Brazil. And sometimes it's delayed because there is some expected things like a strike and so on. And so nothing is done for the importation and stuff like this. So expect the unexpected all the time. Does this really big thing and also with Solon. It was also not very lucrative in the beginning. So it was just started to take off.

[25:01] Guest: When the (unintelligible) legislation in Germany started before, you have to really have a very long term perspective for really to survive and also some for some funds for that, because also they would come up. You have also competitors coming up, for your really good idea and. You’re supposed to be prepared. Let's let's summarize it.

Host: Be prepared for the unexpected. Yeah. PI Berlin is still running. Unfortunately Solon, it didn't make it. Like so many other companies, just like one of my companies I was involved with. So why did so many solar cell produces a solo model, produces in Germany. What's your take? Because you were heavily involved in that and you followed it everything from start to end when one is inclined to say right?

[26:00] Guest: So I said, as I was mentioning, as I've been mentioning at the beginning, it wasn't really lucrative because it was still far away to be competitive to the grid. Electricity prices off grid systems. It was already like in Brazil, it was already competitive.

Host: So let’s add a .. 2000. Okay.

Guest: But fortunately, in Germany, there were some good politicians with this Mr. Fell and my chair. I really got the idea. We have to make a help, because this technology is good. Solar energy is available everywhere. So it's not also the political implications involved with the fossil fuels that you have to have. Very nice to Saudi Arabia because if the whole oil and it will be strange for democratic countries. So they have to be in ISIS. Saudi Arabia is not democratic at all, because they depend on the oil.

[27:03] Guest: So this independency of oil, you can really judge more and more neutral in a way you just untold in international relations and so on. So this is also another implication of which makes it really a political thing, not only a technical thing that we want to have a cheap electricity and they have some. Mr Shear, for example, was working actually as a defense advisor. So it's not really a solar guy. So he was working for a long time as the German, the same Social Democrat Party as a defense advisor. And then he said with all this solar energy. We can solve many problems and you have to help them a little bit. And then he got the idea. We make a fixed fit in rate to give a perspective to the investors of four first four to two, which want to implement solar power plants. So they know. Okay.

[28:00] Guest: If I set up the power plant now, I give for 20 years, I give a certain rate. Begin equals even fifty six cents per kilowatt hour. And so I have some profit margin. Usually it's not so much at the end of five percent or eight percent. And then this took off. So people say, okay, it's really interesting to invest in solar because it's a fit in legislation. So the utilities have to buy the electricity for a certain price. So don't have to negotiate every PPA or the proposed power purchase agreement separately because it's given by law. They have to pay me that. And it was also for the people. Forget it. We'll keep a long term perspective for the investors in solar factories, because if you want to set up a factory, you want to know whether your product will be sold when the factory is ready. So you have this admit maybe it takes two years and then adds to being still in operation.

[29:00] Guest: Depending on the business plan, but maybe for 10 years or so in order to recapture the capital, you invested in that company. So you have to have a perspective of at least 12 years. And this was not possible before. It was only possible due to this German if he didn't legislation which was then adapted to many other countries. And that started about 2000 doesn't do it justice. It was just a celebration, 20 years of feed in tariff.

Guest: It started in really at 2000. And then there's also a second mechanism which makes it all the more interesting because there's been some funding and incentive before. So you got just a certain amount of money to install your PB systems. And then people are not really eager to have a high energy yield from the system and

really to invest in a sustainable way to do this.

[30:00] Guest: Feed in legislation, which was then also that there was some degressive feed in tariff or if you would install a year later, then you only get seven percent less of the initial feed in tariff in, say, two years later, two terms, 70 percent and so on. And so this was the initiative to invest now and not to wait until the solar cells get cheaper. They got also cheaper. But this was also read a breakthrough that this. This went very well, I think, until 2009 or so, not 2010. Then Mr. Wislow got the idea. Are the rents too good? You have to stop them a little bit.

Host: And then he said he was. Sorry, Mr. Wilson.

Guest: Yes the German Liberal Party. Some kind of economic, Mr. Minister, and so on. And you thought that this kind of socialistic planning.

[31:00] Guest: But is there this is legislation. But then it was really destroyed all this planning perspective of the investors for solar power plans and also for the investors in solar factories. So the banks, they raised their interest rates. If you want to invest in solar and on the other hand, the output and you just got, I think in 2009 put down 10, you got suddenly 25 percent less from the feed in tariff. And this broke the neck of most of the solar industry. So about one hundred thousand jobs have been lost. One hundred thousand one hundred thousand lost 30000 jobs at the beginning of the high times. And then it was thirty thousand only. So you compare it to the coal industry that is still negotiating with billions and billions, billions. And altogether, these are only 20000 jobs.

[32:00] Guest: Not even nice jobs is a coal jobs. We offered high tech jobs, one hundred thousand future jobs. And people think of the negotiations, about 40 billion euro for about 20000 people have worked for us. And the other thing was for solar, it wasn't really necessary to do would have to continue with the digression of seven percent. And then we would have arrived at quite reasonable prices for solar. It's creeping up a little bit now and it's a last couple of years. More for private systems together with a battery at home. So they are more independent from the grid feed rates and the ones that we just use their own electricity. But Germany. I think in two thousand nine or something like this, about 50 percent of the world market and now it's only five percent of the world market in solar. In total, the technology is lost. This is mostly everything happens in China. I. And this is a bit of pity because this would have been a great opportunity for the German industry.

[33:04] Host: I mean, in 2009 because, I was myself a managing director for solar company back then. I mean, so I remember quite well on top of the, let's say, new legislation. And you mentioned that there was also the financial crisis, of course. Right. Which I'm sure didn’t help.

Guest: It was positive even for the solar really needs because the sun is always shining and you've got a fixed return. So if you invest in another company, you don't know whether the output exists in two years because the company is (unintelligible). But the solar sun doesn’t go bankrupt. So if you have a system in place, there would still be output of it. And electricity is always something of value.

Host: So despite the financial crisis. So solar companies broke. And then, of course, that was the massive competition then from China. Right. So this was German for the German industry.

[34:03] Guest: You have a fixed to prohibit imports from China. So I think it was a, or at least some minimum prices from China, but it didn't turn out very well because there was only basically one company I mentioned. Solar World drove it in. It is the only company left there by then.

Host: Only one company was left. Solar World. Right.

Guest: And they probably, the other already have been broke. And so it was just too late. And also it was not the right thing because it didn't give the long term perspective. It would have been more important to give a long term perspective for the long term feed in rates rather than to have a minimum price for the solar modules. Which is ridiculous if you have some technology progress and you can make the solar cell cheaper and you would be able to produce solar electricity cheaper, why should you keep up artificially the price?

[35:02] Host: So many critics say. I mean, it definitely the feed in tariffs. The EEG law was very helpful to bring the cost down to achieve scale and economies of scale. But in the end, that helped mainly, let's say, foreign and Chinese solar companies to expand their production capacity. And these critics also add then that there was a lack of in the proper industrial lawmaking to not just create the market, but also. Great to keep the industry in Germany, which possibly China is doing by giving out. That's what others say. Giving out very cheap loans to build massive…

Guest: Both is true. So in one part its politics, as I've been already mentioning. So this is worse. Also, it was a bit of German fear or whatever.

[36:00] Guest: So just as Chinese, they won't fear about really, really making very, very big factories in Germany. This was the no, they limited themselves somehow. So they're not really eager to really stock up more and to make it cheaper. They are just more focused on making really high efficiency solar cells. And they're diversifying in technology because they're a bit afraid that some technology can emerge, which they didn't know of. And so they make smaller companies, but different technologies. And the Chinese, they produce most simplest technology, silicon, solar. And they just stocked up, stock up. So make gigawatt plants in Germany, but still in the hundred megawatt range. And therefore, they couldn't be really competitive. It's not only the breaking cost. If you go in big factory there, you hardly see a lot of workers there. It was really the lack of a bit of a global perspective in Germany.

[37:01] Guest: So they just were more focused on the German market. Okay. Exporting also some. But then should also have been considered if you are the model. Even so, what you said, they just made solar cells for a very long time. And just at the very end, they started to build modules and now I think they start to make systems. And this should have been coming much earlier. Just to think about energy supply. Not only making solar modules, so energy supplies or Africa, they are one billion people without electricity. How they can supply them? Do you have to have solar module, you have to batteries? You have to have big inverters. And so I want to make a complete integrated system. I was expecting Bush would do that when they entered the market while I was in Russia. Everything they have batteries. They have a lot of power, electronics and all Siemens.

Host: Right. I mean, Siemens is a power plant company, right? They stayed in Solar for a long time.

[38:00] Guest: Unfortunately they were not really eager to decrease prices. So they just they started in the 80s. They were already solar modules from Siemens. But there were some governmental funded projects or development projects. And Siemens was basically only supplier. And they know what they get for the models. And so they didn't. very eager to push down the prices. This is not only in solar. I think wind also they were quite early involved, but then these smaller companies in Germany took over during that time. (Unintelligible) was also a small company and so on and so on, which made it really competitive. And this wasn't the case with Siemens or Siemens is more almost like a governmental entity. So they were not really eager to study. Siemens was really a dream.

[39:00] Guest: So dream employer because it was great and got a lot of press. And the companies offered a lot of opportunities, but this happened with that many other countries like IBM and so on. This have been just traditional big companies in the 80s and so on. This is so.

Host: But I mean, it is surprising, right? I mean, I was in Ghana installing solar modules in 1996 and the only model where we got. Was it photowatt back then already, maybe a photowatt? And there was Siemens, the m55 module. And they were the only one. So they've been and they also the inverters were from Siemen. So you wonder why they didn't scale the business and why they are not the dominating solar company these days.

Guest: Yes, they could have been.

Host: Why do you think they didn’t?

[40:00] Guest: They didn't hear from from Solon when they started.

When I started Solon I think the basic trigger was a study by Greenpeace during that time, they showed that it's really possible to make solar much cheaper. But I think was by MPB at the time, Messerschmidt Spokeo Bloom the study, they showed that it's really cheaper and then people like I know the biggest story came up, wow, we can, we should do something about it. And two, you are joining it. Then set up solar units of one of the first companies. Solar Fabric in South Germany and they heard that we made it go public with shareholding companies. They did it a week later. So that's about this really triggered. The thing is, is if you show that deposit before you think otherwise, Siemens and you might be afraid of competing with Siemens and so on. But the study was on the on the table. This was OK. That's possible. As is well researched. And why not? Let's risk get into those as well.

[41:00] Guest: So really, that's a point of all the solar businesses in Germany before it wasn't really a business. As I told you. If you want to do is for solar. Rather, go to Siemens or you go to be an academic sector.

[42:00] Host: So I’m back. It was the DHL man. Alright.

Guest: Always be nice to them. Because the whole supply, depends on them. Now, it’s just many shops are closed and you can’t get mad at the delivery man.

Host: So we were talking about Solon how it all got started. It wasn't lucrative. Then we got the law. The EEG. And we're wondering why Siemens didn't enter.

Guest: I mean, Bush did get in and so on. Yes.

Host: But Bush did end up quite late. And then they, uh, they bought Azol. And it was a late stage trade and then they didn't enjoy that business. It was too late, right?

[43:00] Guest: Yeah, for the solar model. I was already mentioning that this is not about solar modules. This is just make is only one component of the electricity supply. And then the Chinese already focused on that. And so it's very hard to compete against the Chinese with a common component. So they probably the Chinese can make every component of a car much cheaper. But they are not able to make a complete system like a car entire. Now what they are but let's say 10 years ago, this was just a dominance of the German car industry that they can make you even this Chinese companies with a lot of electronics and stuff, make them from China and even in German cars. But they are really good in the system. Engineering to make a good working system like a carpet would have been the same for the energy supply system. And this was misters chance was asking some Bush people. But so the Bush solar people were not talking to the automotive people from Bush and so on.

[44:00] Guest: And so when was it was a kind of internal policy, which was why it didn't work out or the technical opportunity was there. But they didn't see the chance because nobody else was doing it. And they didn't want to be the first probably or something like this. Although in Brazil, you see if you see Bush air-Conditioner standing close to a Bush model, but they don't fit together. So if you say, OK, I want to power my Bush air conditioner with a Bush solar module. There was nothing in between. I know you have to feed into the grid. And then you get electricity from the grid and put it in your way. Very strange things which they could have easily solved as often.

Host: So you think a more holistic approach, total system intrinsically, right, where there is a target to protect the market share. Move on. Yeah. So you mentioned when you started at the price for solar cells was insanely high.

[45:00] Host: It wasn't even a product, right? It was just an R&D idea. You could say. And then the prices dropped dramatically due to the economy of scale. What's the share of solar energy these days and in Germany.

Guest: Can you tell these days? Exactly. It's really high because we have a very nice, good weather period until we have some these mid days or that could be up to 70 percent share of solar power. But electricity demand for electricity for some hours. But if you see over the year, it's about seven to eight percent. So 7-8 percent done by solar winter, much less. And yes, if you go to energy transition, we have to think right. We think it was about mobility, about heat and so on. So we have to do the sector coupling about why the price of solar is so cheap now.

[46:00] Guest: So even in Germany, you can make solar electricity if you go to large scale in the vicinity to three to four cents per kilowatt hour. This is very competitive against all other energy options, especially if you take into consideration the CO2 tax, which will be in power, I think, next year, actually vicinity of 30 euro per ton. That's is equal if you have a coal power plant, the lignite power plant working, which makes a one kilowatt hour of lignite, just a three year cent more expensive per kilowatt hour. And then you have a solar valve below that value. And this makes solar really cool.

Host: Yeah. So what is required? So now solar is at three, four cents in Germany. Right in the beginning, you mentioned in regions with a lot more sun like Saudi Arabia and Qatar. I think you mentioned one point already per kilowatt hour.

[47:00] Host: You're already talking about one. That's dollar cent or euro cent and all that.

Guest: I think it was euro cent what's the last publication with also importable, for example? There was one tender was one point five cent per kilowatt hour, what I would say at Saudi, Qatar. So the last tender was and this was euro cent. But you've got more sources. Be more it goes to South Africa. You're still off about 10 percent more irraddiance than are then portable or even 50 percent more. That means it's almost gets 15 percent cheaper there. And this hasn't been explored yet. So it just some kind of countries. I see there’s opportunities and they invest a lot and you make good tenders and have such low prices, which is really cheaper than everything. If you're just burning gas, just thermal energy is more expensive than electricity for one point five cents per kilowatt hour. Yeah.

[48:00] Host: So if you agree that the emission of CO2 need to be avoided. Now, obviously, gas and coal is not an option. So why do you think nuclear energy is not an option to move to a CO2 free electricity market in general?

Guest: If you're just sitting on your point or very superficial point, you see, OK, it's not producing CO2 that must be good about a lot of other constraints first. The problem with the waste, though, there is no final waste storage. I think no way in the world the Finns now say they will have something on something like this. Then also from the supply of the fuel. This is 100 percent important. There's not uranium mine or something like that. Germany's or are you still dependent? And then, even if some countries which are able to control it very sincerely that the operation of nuclear power plants is always the nuclear option.

[49:00] Guest: This is I think France or England just started nuclear power because there was a military option for the nuclear and I think Brazil from the 60s, they also started nuclear program because they want to expect, they expect a nuclear bomb. Now, again, no, they kind of militated directed detectors or they are going on the way to about that. So how we would limit the amount of countries, why you should allow Brazil to have nuclear power and prohibit to Iran or something like this is a there's no global solution for nuclear power plants.

Host: So how is nuclear energy correlated to the military application…

Guest: Because you can always modify it, as they say. Usually people say no. A lot of security systems which don't allow to enrich, use enriched uranium to build nuclear power if you only allow to a certain amount. But how you can really control that.

[50:00] Guest: You see, in Iran, it's really, really difficult to control all that stuff. And therefore, I don't see it as a global solution. And Iran is already quite civilized. If you go. Some countries in Africa. Government is changing every couple of weeks sometimes, and you never know what's going on. How you can offer them a nuclear power as an option. This is a great proliferation. This is a big problem. I see. So it's not as a suitable as a global measure to lower CO2. And last but not least, is also the kind of operation you have of a nuclear power plant. If you have solar and wind and nuclear are working together, why should you close down the solar power plant in Germany? It's not able to throttle down a lot. As a nuclear power plant always must have a minimum load of 40 percent of its maximum load. Below that's not possible to, you see it also even at negative electricity prices. Nuclear power plants never go down to zero.

[51:00] Guest: They're always working at about 40 percent of their value because it's technically not possible, too costly. They have to be cooled and so on. And so I don't see that as an option. This is more a technical point. Also, the other technical point is as if many countries which have a vast extension is not only as tiny as Japan or Germany, where you can have some nuclear power plants and supply the whole countries. If you have large countries, for example, I know lot of about Brazil. The distances are enormous. And even in Germany, the grid costs are now more than a generation. Costs in countries like Brazil would be much more because the distances are much, much higher. So you have to spend a lot of money in the grid extension costs for some nuclear power plants. And you cannot install it inside the cities where electricity is most needed. As you can with solar, you can cover all the roofs inside the city with solar and you have the electricity right in place.

[52:00] Guest: That's not possible is nuclear. So you're always to add up the cost for the grid extension and so on. And there's this. This is also not considered to be some protagonists which say, OK, nuclear is an option, but they don't go into the details.

Host: All right. So because it's a one power plant produces just so much energy, you need to cover a large area. And then the critical assets also drive up the cost for the extra kilowatt hours.

Guest: And also, you have to secure the 40 percent of minimum load they did in Germany by offering some special tariff. So if you have of how you call a steelwork or something like that, you get the electricity, you nighttime much cheaper. About half the cost and doing daytime, even for private households, you have electricity, heating. They give the electricity for half the price to nighttime.

[53:01] Guest: And this was in the 60s and 70s to keep all the very big lignite and nuclear power plants working at a minimum load. So they make this artificial consumption during nighttime. Before that, in the 60s, there was another big consumption during nighttime. And they couldn't really operate a lot of nuclear power plants during that time because, as I mentioned, they have always to keep the 40 percent running.

Host: Some also say there's a lot of hidden costs in nuclear. That's why it's actually not so cheap. The other thing you mentioned.

Guest: Yes. For some, the insurance costs, the insurance is paid by the public for nuclear power plants. The government. Because there were some cost evaluation by some insurance companies. And they said, okay, if the risk is not really big, but the costs are really high. And if we have to cover all the costs, we would have.

[54:00] Guest: So the premium for insurance would be, I think was seventy two billion insurance costs per year for nuclear power plants.

Host: Not one single one.

Guest: I think was one single one. You can look it up, I think was in the manager magazine from in 2011. If you're just type in insurance costs of nuclear power plants in Google, you'll find that article. And this was made by a professional insurance companies. I don’t know whether it was mentioned, a workforce issue while other Munich agreed with Japanese. So it was not only just the estimated by Greenpeace or something like this, but the professional insurance company. And therefore, it's covered by the public. And most of part of the world. And these are not many people. There are not a lot. This is a big, big subvention because they say all this only solar is subventions. Nuclear is really cheap. And if you just go away from the hidden costs, also the security costs.

[55:00] Guest: This is also a thing. Before 9/11, nobody was thinking about a passenger airplane could crash into a nuclear power plants. So the nuclear plants are only safe to small jet fighters, too precious to them. They are not capable to withstand impacts of large passenger airplanes because nobody expecting that could happen. And there was also a big study in Germany and they found out that not a single nuclear power plant in Germany would withstand a 9/11 attack. And so it's really not safe. You can argue what's the proportion? And it can make a lot of statistics, but it's really hard. And the risks are covered by the government. And there is no other technology has that if you would just operate a wind power plant or a solar power plant. You have to be responsible for the power plant, the damages it may cause. And you have to pay the insurance company insurance to cover that.

[56:02] Host: So from your words, it sounds like it's the super obvious choice to go solar, to go wind, to maybe go bio gas or hydro, maybe in combination, and I guess also at some storage to compensate for the fluctuation in the production of energy from solar and wind. So why is not the whole world running on 100 percent renewables? Why just seven percent in Germany of solar? And why not? Why is not every newly built power plant solar, wind, bio gas, hydro? Why is that, right? Even if it's not only from the environmental aspect, but also from the cost perspective, because you say it's cheaper. What's stopping the whole ball to go renewable?

Guest: If you say that a global perspective, most of the new power plants are renewables. Now, more than 50 percent of all new power plants constructing the planet are renewables.

[57:00] Host: What's the metric for that? It's getting gigawatts. What's the metric for the 50 percent? Is it gigawatts or kilowatt hours or.

Guest: I think it's only giga. So I have to admit, it's just installed power, not the generated electricity is all in terms of generating electricity. It's, it's less. Okay. I have to admit, this is.

Host: But let's assume it's 25. So it's still 25 is nice. Right. But it's 100 percent so. Why is it not 100 percent right?

Guest: Yeah it's big problem because this kind of, let's say, customs that the people used to have conventional power plants. And I was seeing that in Brazil. So we are identifying some in Amazons, so we say, OK, they are paying so much for the diesel and PIAB would be much cheaper with solar. But that kind of eastern networks. So the government was thinking is doing something good to subvention remote power supply and formerly it was only possible by diesel.

[58:00] Guest: So they subventioning the diesel supply there. And a lot of money from the supply chain gained a lot of money by that. So they are not easily eager to let solar there because they wouldn't gain anything, because once the solar plant is installed, they don't gain anything by it. And so they are heavy lobbying against solar because they say, OK, are so many families live from the diesel supply there. And one is therefore repair the diesel. And it was also North Africa with a project. We did that. They take the university. They also installed a solar power plant and was even sabotaged by people because the some people live quite a lot by doing permanent repair on this diesel powered pump. And solar pump is once installed by a foreign company even. And they didn't get any profit from that.

[59:00] Guest: And this is constraints which you don't see on the first. Yes, you're absolutely right. If you say it's cheaper why don’t people do it do this as some kind of old fashioned. So sometimes the legislation and so on is a bit behind that. But if you see, for example, astonishingly, a lot of this is happening in the United States at the moment, even with the Trump government, some investors, they see just the cost and they say, OK, Texas, they most of nuke new power plants are solar because they have oil or not. They're close by. But they see a solar is much cheaper. So we go into solar this is quite astonishing.

Host: OK. So. I mean, remote locations, this is certainly special. And then you mentioned the legislation like subvention for, let's say, conventional forms of energy. Then you have the areas where in Texas where people just look at the cost and it's thriving. Right. It's moving ahead.

[60:00] Guest: Also up from the top of organizations or for some, if you've got the nuclear industry, you make some nuclear scientist institutes and you get some. I was seeing a by chance a presentation by (unintelligible). They give that's a Russian and a Russian nuclear power plant. And they did it much smarter than the solar people did. So they are not offering us power plants. So they're offering just. Obviously, this presentation was intended to give to some stakeholders in the government. So and they say, OK, I'll be offer you also study in Moscow for 100 students and you can also make use for sterilizing with this nuclear power stuff and so on. So they are giving a more holistic concept than just selling solar modules. This the solar industry could have could have been convinced of that. This is quite interesting. But not.

[1:01:00] Guest: And so they are just working around that to set up an institute, a research institute in the country, which is also quite good for the politicians, so they can open up a research institute and be proud of it. And so on. This is not really happening in the solar business. So they just installed the power plant and make it really cheap and that's it. And the all the surrounding stuff is not happening. Also, from the Bricusse perspective, the cool people are organizing unions, very strong unions, very traditional unions. And so they have a lot of power in the government or in the political area nearby. What's your think, Mr. Cappiello? Was once heading? I think the idea to close down the coal industry much earlier due to the CO2 emissions. But then there was a bit in one day there was a demonstration here in Berlin. And within a couple of hours, they shut it down because the unions were quickly organization. The demonstration there and the strike.

[1:02:00] Guest: And this didn't happen with the solar industry. I think there was not a union for solar. And the startup is not really also very union like so people. They lost 100000 jobs. And publicly, it hasn't been really recognized by some people. But for the coal miners, as always, it's always in the news that the coal mines miners are losing their jobs. And as a result, they got really, really a lot of money for giving up the jobs.

Host: So if I put that together. That would mean, like, smarter lobbying of the solar industry would be helpful. Right. So you compare the coal at home activities and also in a way, also to align with the workers, the unions to protect the jobs would have been exceptionally smart lobbying for the solar industry, right?

[1:03:00] Host: And as you said, nobody took of the at least hundred thousand jobs that got lost in the solar industry in recent years.

Guest: Not many people know that. It's a similar strong lobbying, so they just at the moment is under discussion with this corona crisis. So they want to subvention new buying of new cars. So they just do the same thing they give to, you know, two or four thousand euros to give a new car, which is still emitting CO2. It's not for electric cars just to keep the jobs. And this all in the current conventional car, the commissary.

Host: So there's also. That's a good point. Moving to a very current topic. The COVID 19 pandemic. And many are afraid of that or maybe others are looking forward. That the current crisis around the COVID 19 is now could set an end to the expansion of renewables.

[1:04:05] Host: Cause for many that's just a lot of money that needs to be spent on renewables and. So what's your take on that?

Guest: I would think the opposite because it's a good opportunity now because this energy transition has to be done anyway. And you need a lot of investment now. Why should you put it into the old industry, which was obsolete anyway? So the politicians are really smart is to know whether it is depends on the kind of politicians I sometimes I doubt that they are really smart and they will to keep the old industry going.

Host: But you mentioned the lobbying, right? So you mentioned the lack of good lobbying for the renewables rights.

Guest: Yes. This is exactly this is this one issue into sometimes also the politicians are afraid if you see the background of the politicians, are they not scientists? They are not engineers.

[1:05:01] Guest: They are just juristical persons and juristical persons are relate to the existing people standards and so on. And so this is already a conservative element in their brain, which keeps sticking more to the old stuff and in times of crisis. So it could be it's a big opportunity. Let's say, though, if you agree, we would have some innovative people in the politics that would say, OK, that's a good one, we have to invest a lot. And why not doing something useful and something progressive which is compatible with the future, then would be quite a positive thing with the COVID 19 crisis. Also from the other side. So what we have been always promoting, like we do now, videoconferencing and so on, and it's good for the environment. If you don't go to the conference, if you do videoconferencing, they get the low carbon footprint is much less.

[1:06:02] Guest: Now, if you're just using some watt hours now here to talk to each other, why we would have spent tons of carbon dioxide to go on the conference around the world and hopefully zoom using as many positive things as they are. And it also shows me how quickly some things can be changed. This is show that is in a couple of days, everything changed. And so with the energy transition, it was really, really very slow that something can be changed. So are the coal power plants can be switched off in 30 years only and 2030, not 30 years only, but also in a matter of decades. And so on. And now things are done with within some hours, others are changed and changed. And for me, that's a quite interesting period at the moment.

[1:07:00] Host: Yeah. So it's yeah, you're right. I think humans are good and react on a real crisis. You wonder if the ecological crisis is big enough to make that change, right?

Host: Yes. Problem is the time delay. You see the already IBF now a time delay of 14 days between a measure. So you have a measure that people should stay at home and so on and we they are only working days that it's over. In fact, it's going down. And this is a climate change is it's not 14 days. It's maybe 14 years to a measure now which costs a lot of money. And you don't see any immediate results. You don't see it in two weeks. You don't see it in two years. You see it in a decade or so that if you would decrease. So humans are, as you see now, some people make manifestations now because they don't see the result of the measures immediately.

[1:08:00] Guest: They say, OK. We don't see the results immediately and therefore we don't accept those measures. And for the climate crisis, is it time delay is 100 times more. And therefore, that's quite difficult. So politicians and the public see the necessity to do something.

Host: Back to the initial idea of just subject of time. So as I understand it, it's not a cost issue, a technical issue which stops renewals being used on a wider scale. You think it's more like a legislation political mindset, really mindset aspect to increase the speed of the application of.

Guest: Exactly correctly. Technically, the no, it's just if you increase production, we've doubled the production of solar cells. The price goes down by 23 percent. This is a long experienced learning curve. [1:09:00] Guest: And you could just make the market price going down theoretically. And politicians say okay we wait until the prices go down. Or we wait and then nothing happens. We saw it happen for a long time, for decades in the solar industry. And just after this the market was there and prices was down drastically.

Host: Yeah. Well, we are yet to see what happens post COVID 19 and let’s keep the fingers crossed that the society. Let’s say, because we are all part of this decision making that we embrace the opportunity and the demand for investment and also the demand into renewable.

Host: Hey Stefan, thanks a lot for joining. It’s been great to talk to a real pioneer of solar. You started early, founded a lot of companies.

[1:10:01] Host: Contributed a lot to research. I’m sure we’re going to see each other again on this show, hopefully soon. And all the best for the next days. Stay safe. Bye.

Guest: Goodbye.

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