Support programs

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Support and incentive programs for utility-scale solar generation

The approaches most commonly adopted around the world are:

Indirect incentive measures

Price support mechanisms

Amongst the most successful incentives have been those that set a specific price for each kWh of solar power delivered. These are often referred to as Feed-in Tariffs or FITs.

In a Feed-in Tariff, the electricity price is set by the government, but usually paid by the relevant electricity company, where the installation is connected. In most cases the tariff sets the total amount paid for each kWh generated and fed into the grid. In some countries (like the UK for example), the price applies over and above the standard electricity price.

Volume-based obligations

A second approach is to place an obligation on electricity companies to obtain a prescribed percentage of all the electricity they sell from renewable sources. Sometimes this obligation, often referred to as a Renewable Portfolio Standard, is also broken down to specify a fixed amount to come from PV.

The UK's Renewables Obligation (RO) is a similar mechanism. Below 5MW, generators can choose between the FITs and the RO; above 5MW they are only eligible for the RO.

Fiscal incentives

Tax concessions are given in some countries for the installation and/or operation of solar generating stations. In the USA, for example, Investment Tax Credits were made available for some years to offset investments in PV plant. They were also eligible for a short period under the Production Tax Credits.

Other financial support

Certain jurisdictions also provide other forms of financial support, such as grants toward the capital costs of equipment.

The US Department of Energy had a Loan Guarantee Scheme which supported capital investments in solar and wind power plants, ending in 2011.

Direct support measures

International and regional programs

The Clean Development Mechanism of the UNFCCC program provides support for renewable energy projects in some countries, including many of the projects in qualifying countries listed in the Wiki-Solar Database.

The European Renewable Energy Directive, has stimulated many of the national measures, such as those described above. Because it also allows for some transfer of renewable energy credits between countries, it has also stimulated some bi-lateral programs, such as the german-Greek Helios project.

The Desertec project in which countries around the Mediterranean are collaborating, may also stimulate some PV projects.

National programs

Many countries have specific programs to increase their renewable and PV capacity. India's JNNSM National Solar Mission, has stimulated many PV projects. Much of the new capacity proposed in Australia, South Africa and Israel, for example, is supported by national programs.

State/provincial programs

In some countries the states or provinces have substantial programs.

Several US States have Renewable Portfolio Standards (see above) or other mechanisms to support renewables, in addition to the federal government's fiscal measures. The Canadian province of Ontario has adopted an ambitious Feed-in Tariff (see above), as have a handful of US and Australian States.

Several Indian States have initated their own projects in support of the national program.

Encouraging solar deployment

Several different approaches have been adopted around the world to support the deployment of utility-scale solar generating capacity.

In principle these are intended to accelerate the transition to grid parity, by improving the relative benefits of solar generation beyond the intrinsic charateristics illustrated here.

The main approaches are summarised on the left, divided between direct mechanisms, where the governments act directly and manage programs to increase deployment; and indirect measures adopted to stimulate action through the market.

How successful have they been?

The deployment achieved in the major markets is summarised here.

Support programs

Many jurisdictions actively encourage the deployment of solar and other renewables

Westmill Solar Farm one of many 5MW plants installed in the UK because its Feed-in Tariffs had a 5MW ceiling

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