by Staff Writers
London, UK (SPX) Apr 20, 2016
Creating energy with solar is not only environmentally friendly, it can also be good for your bank account too. Whether you are considering solar as a way of offsetting your electricity bill in your home or business, or if you are considering a solar installation to avoid the high cost of connection to the electricity grid, solar can often save you money.
In addition, there are often subsidies, grants or other financial incentives available to make solar a more attractive purchase. In some cases, these incentives alone are sufficient to pay for your solar installation over a period of a few years.
Installing electricity to a new building
Of course, there are limitations to this approach. You have to produce all the energy that you use, and you will need a watchful eye on your electricity usage to make sure you do not run out. Yet this can be a practical option for many locations where a conventional electricity connection is otherwise unaffordable.
Subsidies, grants and other financial incentives
Various countries offer financial incentives for people to invest in solar, either through grant schemes that help pay some of the cost for installing solar, or more commonly, through a feed in tariff, renewable energy certificates, export tariffs, net metering or a combination of all four.
As solar prices continue to fall, these subsidies are being reduced. Some countries have already reduced their schemes to nominal levels and it is widely expected that virtually all subsidies will be withdrawn by the end of the decade. However, the recent COP21 World Climate Summit held in Paris during December 2015 brought environmentally friendly power generation sharply back into focus. Many governments are now reviewing their incentives for encouraging the uptake of solar and this is likely to prolong or extend some of the schemes for longer than previously anticipated.
Grant Schemes, Low Interest Loans and Tax Rebates
Grants for installing solar are now becoming much rarer, although a few schemes are still available around the world for specific applications. In the United Kingdom, for example, there is a Rural Development Programme that has a fund to help farmers, land owners and community co-operatives. This fund consists of a grant of up to Pounds 20,000 to test the viability of a renewable energy system, followed by a low-interest, unsecured loan to fund up to 50% of the installation costs for a wind, solar or hydro-power project.
In several States of the United States, including California, there are tax rebates for solar energy, whether these are installed for residential, commercial or agricultural purposes. There are also rebates for solar installations for low-income families and for multi-family affordable housing projects. The exact detail of these schemes does vary between counties and states.
These are just two examples of the schemes that are available. There are other examples and if you are considering installing a solar energy system, it is worth investigating whether there are any grant schemes or tax rebates that may help you fund part of the cost.
Feed In Tariffs
Feed in tariffs typically work by providing a payment for every kilowatt-hour of electricity generated by a solar energy system. The payment is made whether the electricity is used by the owner of the system, or if it is exported. The tariff is typically guaranteed for around twenty years and most schemes incorporate index-linked price increases to ensure the value of the income from the tariff matches inflation.
Feed in tariffs are usually administered and paid for by the energy companies rather than by government. In the United Kingdom, for example, all consumers pay a green energy levy on their energy bills. This levy is then used to pay for various green initiatives, including paying the feed in tariff. Solar owners are paid the feed in tariff every three months, either receiving it as a discount from their energy bills or by having the money paid directly into a bank account.
Some feed in tariff schemes only relate to grid-tied systems, whereas other schemes offer feed in tariffs for both grid-tie and stand alone systems.
Some countries set the export tariff at a fixed level over a ten, fifteen or twenty year period, incorporating index-linked price increases. Other countries allow the export tariff to rise or fall in line with the wholesale electricity prices.
Renewable Energy Certificates
In this scheme, renewable energy providers are issued Renewable Energy Certificates for each megawatt-hour of electricity produced from green sources (1MWh = 1,000kWh). Energy companies are set set targets for the amount of renewable energy they provide as a percentage of overall energy production. Energy companies then have to prove they have produced sufficient renewable energy themselves, by providing copies of their Renewable Energy Certificates, or they must buy Renewable Energy Certificates from other providers in order to demonstrate that they have reached their targets. Failure to provide sufficient certificates results in a substantial fine.
Renewable Energy Certificates trade on the open market. Values can fluctuate, but typically double the income from simply selling the electricity at the current wholesale rate.
Renewable Energy Certificates are known by different names in different countries. In the United Kingdom, they are known as Renewable Obligation Certificates (ROCs), in the United States they are referred to as Renewable Energy Credits (RECs) or Solar Renewable Energy Credits (SRECs), whilst in Australia they are referred to as Solar Credits or STCs.
+ Energy prices are increasing far faster than the general rate of inflation.
+ Many countries have financial incentives to help fund solar installations, either helping with up-front capital costs, or more often by providing an ongoing income to help cover the costs of installation over the lifetime of the system.
Financial Incentives in different countries
These websites provide up-to-date details for financial incentives for different countries:
Solar Daily News
All About Solar Energy at SolarDaily.com
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2017 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement|