BERLIN — Few words evoke as much pride in Germany’s collective psyche as the term Energiewende.

Used to describe the country’s wholesale shift from fossil fuels to renewable energy by mid-century, the Energiewende has become an environmental shibboleth for a generation of green-minded Germans. What started as the pipe dream of counterculture conservationists in the 1970s is the undisputed law of the land, now supported by more than 90 percent of Germans and touted as a global model.

There's just one problem: The price of going green keeps rising. No one knows for sure how much rewiring Europe's economic engine will cost in the end, just that it will be a fortune.

As global leaders descend on Paris for next week's climate summit, the Energiewende is at the center of the debate over how to end the world's dependence on fossil fuels. While Energiewende enthusiasts view it as a blueprint for the world to follow, a growing chorus of skeptics in industry and academia warn that Germany's grand experiment could derail one of the world's most finely tuned economies.

It could take decades to settle the argument. In the meantime, Germany will serve as a testing ground for the planet's most progressive climate policies, a laboratory for the renewable future. So far, its experience highlights both the promise and the risks. While renewable energy has become the single largest contributor to Germany's power mix in just 15 years, hidden costs and unintended consequences, including a spike in greenhouse emissions, have undermined its progress, feeding doubts abroad over the strategy's long-term viability.

Using current energy market parameters as as benchmark, the total price tag for Energiewende would likely be about €1.1 trillion, the respected Fraunhofer Institut projected in an extensive study published this month. That's more than triple the bill for keeping Greece afloat. It's also about 45 percent more than the Iraq war cost the U.S., according to Congressional estimates.

But then, the Energiewende is an undertaking of warlike proportions. No major industrialized country has ever attempted a retooling of crucial infrastructure on this scale.

Under the plan, Germany must abandon nuclear power by 2022 and derive 80 percent of its electricity from renewable sources by 2050. The goal by then is to cut carbon emissions close to zero — to be precise, 5 percent of 1990 levels.

'A herculean task'

Behind the German devotion to the Energiewende is a conviction that it isn’t just for them, but all of mankind.

In a country that has often found itself on the wrong side of history, the Energiewende represents a chance for redemption. Once Germany shows the world that one of the largest industrial economies can both abandon nuclear power and “decarbonize,” so the argument goes, others will follow suit. The planet will be saved.

“We are serious about the Energiewende,” Vice Chancellor Sigmar Gabriel, who as economy minister oversees the project, said last week in Berlin. “It’s real and will be irreversible.”

Even Angela Merkel, a politician not known for playing on the public’s emotions, speaks of the Energiewende in tones usually reserved for the pulpit.

“This is a herculean task that requires a massive national effort,” the chancellor said in her inaugural address to parliament last year. “And I am convinced that if there’s one country that can master the Energiewende, it’s Germany.”

But should it?

German business and foreign experts warn that the ultimate cost of the Energiewende could be Germany's economic well being.

"Germany’s prosperity, more than that of any other major industrial nation, depends on its ability to export. But in a highly competitive world, German industry is at increasing disadvantage owing to the growing energy price disadvantage that it faces," U.S.-based research firm IHS concluded in a detailed study of the Energiewende last year, noting that average electricity prices for industry have risen six times faster in Germany in recent years than in either the U.S. or China.

Behind the German devotion to the Energiewende is a conviction that it isn’t just for them, but all of mankind.

The Energiewende was set in motion in 2000 by a government coalition of Social Democrats and Greens. The real turning point came in 2011, under Merkel.

A trained physicist, Merkel was always skeptical of her country’s knee-jerk opposition to nuclear power.

Rooted in the environmental and protest movements of the 1970’s and 1980s that also fueled the rise of the Green party, Germany’s anti-nuclear movement went mainstream after the Chernobyl meltdown in 1986. In 2010, Merkel faced down the opposition and agreed to extend the phase-out of Germany’s nuclear plants by up to 14 years in order to ease the concerns of the business community.

But after the Fukushima nuclear disaster in March of 2011, Merkel concluded she had no choice but to reverse course. The public's mood shifted from skepticism towards nuclear power to panic. Instead of giving nuclear a second lease on life, Germany would pull the plug.

Competitive concerns

Though Germany is the world’s fourth largest economy, it accounts for less than 3 percent of the world’s greenhouse emissions. In other words, Germany alone will have little impact on the trajectory of global warming. And so far, no other major country is following its example.

The main worry, voiced primarily by German business, is that the shift will undermine industry by sending the cost of energy through the roof. Germany’s electricity prices are already double those in the U.S. and France.

“This places German industry at a serious competitive disadvantage that is only going to get worse,” said Ulrich Grillo, President of the German Federation of Industries, the country's main industry lobby. “The electricity factor is a burden that endangers industry and therefore the livelihood of companies and their employees.”

The reason German power is so expensive is that the government levies a special tariff on electricity customers to subsidize the expansion of renewables. The charge brought in about €24 billion in 2014 alone.

Companies considered “energy intensive,” such as chemical makers and rail operators, are granted rebates from the levy.

Those companies, which number about 2,000, saved nearly €5 billion last year. Yet most German companies, including industrial ones, have to pay in full, accounting for about half of the total levy income, or €12 billion.

That may not seem like much in a nearly $4 trillion economy. For many companies, the cost is negligible. But the charge has more than tripled since 2010 and is likely to continue to rise.

That’s because the government guarantees the owners of wind and solar installations a fixed price for their electricity that is often a multiple of the market price. The price guarantees, which last for 20 years, were introduced to provide investors an incentive.

The renewables glut

Renewable power may have never gotten off the ground in Germany without the subsidy, but critics say the system has worked too well.

The flood of renewable power into the grid – Germany now draws nearly one-third of its electricity from renewable sources – has sent market prices tumbling because the grid is already full of conventional power. Plummeting global prices for coal and gas have exacerbated the problem.

Those market forces have pushed wholesale price for a kilowatt-hour of electricity in Germany to less than 3 cents. The price guarantee for power from a wind turbine or solar installation is usually a multiple of that.

The levy, which is adjusted annually, funds the gap.

The steep rise even worries companies that have been granted a rebate. They complain they have no visibility about where the government’s policy is headed. When faced with a choice of expanding their operations in Germany or doing so abroad, many opt for the latter.

In the past two years alone, the pride and joy of German industry — Mercedes, BMW and Audi — have all announced plans to invest in new factories in North America.

Even if the Energiewende ends up costing more than €1 trillion by 2050, most Germans seem convinced there's no alternative.

While the cost of energy is only one of an array of factors influencing such decisions, few major industrial companies are planning big investments at home. The impact of those decisions won’t be felt for years. By then, industry officials warn, it will be too late to do anything about it.

Some big players are already pulling back.

Siemens, the engineering group, said in May it would cut 1,600 jobs in Germany at its power division as a direct consequence of the Energiewende. For decades, the company has produced and serviced many of the turbines that power Germany.

“The German Energiewende has for the long-term removed any basis for us to sell our fossil-fuel based products in Germany,” Chief Executive Joe Kaeser told an employee newspaper in May. “Even some of the most modern power plants in the world, built by Siemens, of course, are slated to be shut down, meaning that we lose a lot of jobs in service.”

While companies like Siemens and the German carmakers have the option of moving abroad, smaller companies usually don’t. That has put Germany’s Mittelstand, the small- and medium sized businesses that employ 60 percent of Germans and account for more than half of the economy, under pressure.

German trendsetters

Few Germans appear to be worried. After all, the German economy remains robust, despite the surging cost of energy. In the long-term, the Energiewende could prove to be a boon for business as other countries seek German expertise to retool their own energy systems, its advocates argue.

“We have the chance to be trendsetters,” said Patrick Graichen, a former senior official in Germany’s environment ministry who now runs Agora Energiewende, a Berlin-based think tank.

Though some Germans grumble over the rising renewable energy tariff, which costs a typical German family of four about €250-€300 per year, few want to reverse the policy. All the parties represented in parliament support the Energiewende, leaving little scope for public debate over anything but the details.

Even if the Energiewende ends up costing more than €1 trillion by 2050, most Germans seem convinced there's no alternative.

Issues such as Greece, where Germany has so far put about €100 billion on the line, or even Berlin’s troubled new airport, projected to cost €5.4 billion, have sparked much more controversy.

A government decision in July to bury thousands of kilometers of high-voltage cable to link wind parks in northern Germany with the south received little attention, despite a price tag of up to €8 billion.

The original plan called for power the lines to be above ground for a fraction of the cost. But locals in Bavaria didn't want the lines running through their communities.

Many of the protestors in Bavaria were more worried about suspected health risks associated with overhead power lines than aesthetics.

The expansion of renewable energy has already turned much of the country into a large solar and wind park.

Germany’s rural scenery, the inspiration for the Grimm fairytales and the landscape paintings of Germans masters such as Albrecht Dürer, is now a sea of solar panels, the horizon dotted with 200-meter-high turbines, blinking red through the night.

To spare the country's coastline a similar indignity, the government opted to build wind parks in the North Sea out of sight, about 100 kilometers from the mainland. The area has no shortage of wind, but the rough conditions have made construction difficult and complicated their operation, sending costs spiralling.

Greenhouse emissions rise

The main challenge of the Energiewende is to replace nuclear power, which accounted for about one-fifth of the total German electricity generation, with green power.

Though the country is on course to achieve that goal, it has run into another problem: rising carbon emissions. Germany has pledged to reduce carbon emissions by 40 percent from 1990 levels by 2020.

The government had hoped to rely on gas-fired power plants to produce much of the rest of the country’s electricity, enabling Berlin to meet its reduction targets, despite the decommissioning of nuclear. Modern gas turbines are the cleanest conventional alternative to coal and can be fired up quickly, a key consideration when dealing with the vagaries of renewable power.

But such plants are also expensive to operate. A drop in the price of coal prompted producers to rely on traditional coal-fired plants instead, triggering an increase in carbon emissions.

A mild winter helped limit overall greenhouse emissions last year. And last month, Berlin brokered a deal with utilities to take several of the worst polluting plants offline. In return for billions in payments, the utilities will keep the plants in reserve for several years before decommissioning them.

Even so, Germany’s emissions goals are “seriously at risk,” a government-appointed panel responsible for monitoring the progress of the Energiewende said in an annual report released last week.

“It won’t ruin us, but it’s not going to be cheap either.”

Germany emitted 929 million tons of carbon dioxide equivalent in 2014. It aims to reduce the total to 750 million tons by 2020. To get there, the country would have to triple its current rate of carbon reduction for the next five years.

Electricity, which comprises just one-fifth of Germany’s energy usage, isn’t the only challenge.

Transportation and heat generation for buildings and industrial purposes account for the lion’s share of Germany’s energy consumption. All told, most of Germany’s energy – over 80 percent – still comes from fossil fuels, including oil and gas.

Energy use for transportation is actually increasing, the report found. Meanwhile, efforts to improve the energy efficiency of buildings, the key to reducing heat consumption, have floundered.

Berlin is hoping for a major breakthrough on reducing global emissions at the upcoming Paris climate talks. But it’s own difficulties in meeting its ambitious goals, could complicate the effort.

One reason is that the Energiewende isn't the only model. The U.S. has reduced emissions by shifting from coal to natural gas, a path easier and more affordable for most countries to follow than a massive shift to renewables. Meanwhile, countries such as the U.K., and even Japan, continue to see a future for nuclear power.

The good German path

The Energiewende’s evangelists shrug off such concerns.

"Naturally we’ve made some mistakes, but overall we’re on a good path and have already achieved quite a lot,” said Graichen, the former environment ministry official.

He argued that the costs, though considerable, aren’t higher than continuing to rely on nuclear and carbon-based fuel over the long-term.

"There is no alternative to the Energiewende unless you want to abandon the climate goals and no one wants that,” he said.

Still, much of the Energiewende lobby’s optimism rests on a hope that further technological breakthroughs will help make it a reality.

One key area is electricity storage. Renewable energy is as unpredictable as the weather. To reduce reliance on expensive conventional plants held in stand-by mode, while taking advantage of windy and sunny periods, the technology for storing electricity needs to improve and the cost needs to come down.

The other big challenge is to connect Germany’s windy north with the industry-rich south. Shipping the electricity generated by northern wind farms to Stuttgart’s auto cluster and other industrial hubs in the south is no easy task. The decision to put the cables underground – never before tried on this scale – makes it all the more complex.

A trial and error approach isn’t an option. German industry, be it machine makers or chemical producers, depends on ready access to copious amounts of power.

Economist Hans-Werner Sinn, head of the Munich-based Ifo Institut and one of the few prominent critics of the Energiewende, has dissected the myriad challenges Germany faces in a series of studies and lectures. He cautions that the government’s projections have often been off the mark and predicts the pullback from nuclear could have disastrous consequences.

Sinn likes to recount the story of Jürgen Trittin, a former Green party environment minister. In 2004, Trittin declared that subsidizing green energy wouldn’t cost the average German household more than one euro per month, or “as much as a scoop of ice cream.”

By Sinn’s calculation, the cost is heading toward a scoop per hour.

“It won’t ruin us, but it’s not going to be cheap either,” Sinn said.

Correction: Fraunhofer was misspelled in an earlier version of this article.