Financing Subsidies Incentives Tax Breaks
Governments all over the world have begun financing solar energy with subsidies, incentives and tax breaks. While they vary greatly in their generosity, these solar energy incentives have been instrumental in bringing the cost of solar and other renewable resources down significantly in the last 20 years.
Japan’s energy ministry was among the first government bodies to offer incentive programs for solar power in the 1980s and early 90s. As a nation without petroleum resources of its own and a talent for technology, these solar power incentives allowed the price of solar technology to come down by nearly twice in just a few years, as the demand for even older types of panels caused their price to plummet.
It is a matter of national security for oil importing nations and countries that have been giving very large incentives to petrol industries to establish a renewable energy base. Therefore, in the last decade, the number of countries that have been investing heavily in solar power rebates and tax incentives has skyrocketed. Many of them are in nations with no petroleum resources of their own, though even oil exporting nations have begun offering solar tax incentives though their energy ministries.
In 2007, solar incentives are now very notably offered in some of the more populous countries of Europe, with Germany and Portugal, in particular, leading the charge. In the United States, each state offers its own incentives as well as a modest federal tax break. Compared with the continued subsidies of the oil industry, these credits are tiny, but for homeowners and small businesses, these matching credits can make all the difference that is needed to make solar power a reality.
If you’re thinking of installing solar panels, check the incentives that are offered in your area. They may be significant, or they may only apply to certain technologies such as a solar hot water heater. Tax incentives may also have a large effect on the availability of certain types of panels. Because the tax breaks on solar power change from year to year and, the trend is toward further subsidization, the market remains quite volatile.
As tax incentives for solar energy become more pronounced, it is possible that the demand for solar panels could increase the price on international markets. European incentives have already made it difficult to get some of the larger panels in North America since they are preferentially shipped from Asia to more lucrative markets.
Countries such as Germany are hoping to be 100% reliant upon renewable resources in the next 15-20 years, so the demand from the European continent is not likely to abate any time soon. Nations with their own manufacturing methods and facilities will be well-placed in coming years to meet their own domestic demand.
