INCENTIVES FOR RENEWABLE ENERGY
Government-led incentives for renewable energy are changing across the world as the green energy market matures.
Climate change and post-COVID recovery plans are pushing the renewable agenda to a different phase.
United States – some statistics
According to the EIA, the United States accounted for about 17 percent of the world's total energy consumption in 2017.
In 2019, renewable energy sources supplied approximately 11% of total U.S. energy consumption.
Breaking that down, almost half (43%) came from biomass, a quarter (24%) from wind, and 22 percent from wind power. Solar accounted for just nine percent of renewable production.
How much further that percentage increases, and with which type of clean energy, will depend on policymakers’ stimulus.
Investment Tax Credit (ITC)
In the United States, the Investment Tax Credit (ITC), also called the federal solar tax credit, encourages solar take-up. People receive a 26 percent discount on their federal taxes from the cost of installing a solar energy system or small wind turbine. There is no limit to its value, and it applies to both residential and commercial purposes.
That generous saving will reduce in the coming years, with the credit dropping to 20 percent in 2021, then down to ten percent from 2020 onwards.
A similar ten percent Investment Tax Credit is also available until the end of 2021, covering geothermal, microturbines, and Combined Heat and Power (CHP). CHP is a system that captures waste heat and puts it to use for space heating, cooling, domestic hot water, and industrial processes.
Sustainable Energy Utility (SEU) - Revolving Loan Fund
Staying in the U.S.A. the Sustainable Energy Utility (SEU) program offers up to $2 million in loans to encourage businesses to invest in renewables.
Money can be spent on infrastructure projects to help reduce people's bills and the environmental damage caused by energy production.
With incentives for renewable energy decreasing, businesses can find other ways to save money and greenhouse emissions. Energy pricing comparison sites use algorithms to select the best energy plan for your business.
Europe's shifting policies
The European Environment Agency (EEA) reports that European Union (E.U.) member states have initiated over 1,900 renewable energy initiatives, with 400 of those activated between 2017-2019.
The principal targets have been energy supply and consumption, with 43 percent focusing on regulations around energy efficiency and 44 percent on subsidies and feed-in-tariffs. A feed-in-tariff pays people for excess electricity generated by a solar P.V. system that goes back into the grid from their house. These feed-in-tariffs have been substantially reduced and rescinded in some countries, thanks to their popularity and take-up.
U.K. and Norway and feed-in-tariffs
An example is the U.K.'s Smart Export Guarantee scheme. People installing new solar photovoltaic (P.V.) panels at home or business locations are paid for exporting electricity to the national grid.
It also covers wind turbines, hydroelectric, and anaerobic systems of up to 5MW capacity.
Norway's electricity supply is 95 percent hydro, and the country's issue is the surplus generation of renewable energy. It has scrapped its feed-in-tariff and constructed lines to export its excess energy. From 2021, the North Sea Link (NSL) will connect the U.K. and Norway's electricity systems via subsea cables, and the two countries will be able to trade power.
Spain, which has some of Europe's most expensive electricity, is enjoying a solar boom thanks to abolishing its so-called 'sun tax.' Until 2015, Spanish homes fitted with solar panels had to pay seven percent more for electricity than non-solar homes. This 'tax' allowed them to remain 'connected' to the grid when their solar panels didn't generate enough power.
This sun-drenched country is enjoying a big solar installation pick-up, with households and businesses sharing small and local solar panel installations.
Electric cars and vehicle to grid
Europe's next renewable energy incentive is encouraging the take-up of electric vehicles mixed with a new type of feed-in-tariff called Vehicle-to-Grid (V2G).
The idea is that most people charge their vehicles overnight when there is a glut of energy, and renewable energy from wind turbines could go unused. The vehicles remain connected to the grid when not in use. Smart meters then flick the car battery's energy store to export power back to the network at times of higher energy demand, earning the homeowner or business money.
Many European governments subsidize the purchase of new electric cars.
Germany offers a 9,000 euros ($9,900) subsidy when buying an electric car, and France gives 7,000 euros ($7,700).
Amsterdam is banning non-electric cars from 2030. This month (JULY 2020), the Dutch capital offered a 10 million euros ($11.4 million) fund to help people buy an electric vehicle – it was all gone within eight days.
In the U.K., electric company cars are subject to zero percent company car tax 2020-2021 and then two percent from 2022-25, compared to up to 37 percent car tax on some petrol models.
Incentives for renewable energy are morphing as the market matures, as new products shift from renewable energy production to its green use and energy storage.
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