Which Countries Offer the Best Financial Incentives to Go Solar?
- Written by Auzzi Shopping
In December 2015, 196 countries signed the Paris Agreement. This document compels participating nations to take positive steps toward introducing clean renewable energy by 2030.
With this in mind, it's clear that the race is on toward zero carbon emissions, and it's driven mainly by solar power installations.
In the interests of complying with this agreement, as well as national pride, many countries offer financial solar energy incentives to homeowners and businesses that implement solar.
Keep reading to find out what's on offer around the globe.
Why Do We Need Solar Power?
Most people think of solar power as a way to save money and increase the value of their homes. Yet, these benefits pale in comparison to the big picture.
The truth is, if we don't bring carbon emissions down to pre-industrial levels, we're in for a rough ride. Studies show that unless we speed up our efforts, we face irreversible and catastrophic climate change.
The inevitable result is an uninhabitable planet. What follows is the extinction of most existing lifeforms, including us.
How did we allow our planet to get into this state?
The Earth's atmosphere is an incredibly complex and efficient mechanism. It can easily handle the carbon emissions created by nature.
What it can't handle is unnaturally high carbon stemming from burning massive amounts of fossil fuels.
In the grand design of things, these resources, like coal and oil, were never meant to see the light of day. They certainly weren't meant to unleash enormous amounts of carbon into the delicately-balanced atmosphere.
Yet, mankind does exactly that. Across the globe, power plants, motor vehicles, and factories continue their relentless onslaught against the environment.
Something had to give eventually.
A Solar Solution
On the other hand, solar panels harness energy from the most powerful and enduring thing we have - the sun.
Our star's energy is abundant and never-ending, and using it to generate electricity doesn't create any carbon emissions at all. It's not hard to see how solar power is the ultimate answer to our global warming woes.
One solar panel can eliminate the carbon emissions from 80 tons of coal during its 20-year lifespan.
However, implementing solar power is an expensive undertaking, both on a small and large scale. That's why governments are trying to make it easier for everyone to get on board.
International Financial Incentives for Solar Power Installations
Across the globe, governments are rallying huge resources to drive renewable power forward, so they can meet their obligations according to the Paris Agreement. These are the world leaders at the moment:
China
China is the international leader when it comes to carbon emissions. Fortunately, they're also streaks ahead when it comes to solar power installations. China currently has 254GW of solar power installed and plans to add another 75 to 90 GW this year.
In 2022, the country has set aside $607 million for renewable energy projects. These include solar, wind, and biomass power generators.
This country also manufactures more solar panels than anyone else. There's even talk of a space-based solar power plant planned for 2040.
China's solar incentives target the power companies rather than homeowners. That is, they penalize those who don't harvest electricity from renewable sources.
Consumers benefit only from reduced tariffs thanks to cheaper production methods via renewables.
United States
The United States offers some of the best solar power incentives worldwide. You can enjoy savings at municipal, state, and federal levels.
Of these, the Federal Tax Credit, or ITC, is the most widespread. This benefit entitles homeowners to deduct 26% of the cost of their solar panel installation from their annual taxes.
This incentive will decrease to 23% in 2023 and expires in 2024 unless the government decides to extend it. Some states have followed suit by implementing tax savings for homeowners with solar panels.
Statewide incentives may include:
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* Sales tax exemptions on solar products
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* Property tax exemptions for homes with solar installations
The latter means you don't pay extra property tax when a solar installation increases the value of your home.
Many power companies also offer lucrative subsidies for homeowners who install solar. Certain manufacturers offer discounts on residential solar equipment.
Other benefits for homeowners include net metering for credits on their power bill and Power Purchase Agreements for discounted electricity. Solar leases offer homeowners an affordable way to install solar power at home.
As a result, the United States currently has enough solar power installed to power 23 million homes. This places it in second place globally for solar power generation.
Japan
Japan has around 77GW of solar power installed, and like China, rewards power companies for producing electricity from renewable sources.
The government also regulates Feed-in-Tariffs for homeowners who supply electricity to the grid via their solar panels. In March 2022, the government set aside $2.61 billion to subsidize solar local solar panel manufacturers.
Germany
With 45.9GW installed, Germany is the EU leader in solar power and shows a strong commitment to continuing its journey toward 200 GW of renewable energy by 2035.
In Germany, the government funds rooftop solar panels that feed all their electricity back into the grid, similar to the power purchase agreements offered in the USA.
India
India has 26.8GW of solar power installed and aims to increase that tenfold by 2040. As a result, the country is taking extensive measures to make these energy sources an attractive proposition for its citizens.
The state offers capital funding of between 40% and 20% depending on the size of residential rooftop solar installations.
India also offers sales tax, excise duty, and custom duty exemptions on solar products as well as the usual savings offered by net metering and power purchase agreements.
Italy
With 20GW of solar power to its name, Italy shows a strong commitment to eco-friendly measures. Residents of this country can receive up to 110% of their investment back when they 'green' their homes.
The incentive has a cap of 100 Euros per household, and homeowners can claim this from their taxes over five years.
The logic behind the super-tax incentives for solar is that people living in traditional Italian homes would be reluctant to implement expensive changes without considerable support.
These savings decline exponentially from 2022 and expire in 2023.
United Kingdom
The United Kingdom might not experience the sunniest days on Earth, but they do have 13Gw of solar capacity installed. The UK is also going all out with huge benefits for homeowners that install solar.
Business owners can deduct 130% of their spending on solar panels from their taxes up until March 2023.
What's more, the government scrapped VAT on solar panels in March 2022, making it even cheaper for homeowners to get on board.
Once they've installed solar power, they can also look forward to a 70% reduction in their electricity bills, plus an automatic 14% increase in the value of their homes.
Australia
In direct contrast to the UK, Australia experiences intense heat and around 6 hours of peak sunlight per day. This huge, sparsely populated country has only 11GW of solar capacity, but that's enough to power 10% of its electricity needs.
To speed up the transition to solar power, the Australian government offers the following incentives:
Small-Scale Technology Certificates
Homeowners receive one STC for every kilowatt of panels they install. They can trade these in against the price of solar equipment, which usually results in a saving of around AU$2250 off the total system cost.
State Incentives
Depending on where they live, Australians may also benefit from incentives offered by state authorities.
In New South Wales, the state provides interest-free loans on solar equipment. In the Australian Capital Territory, Australians may enjoy interest-free loans with no deposit, as well as a 35% rebate on the cost of their solar system.
Victoria solar panel incentives include an AU$1,850 rebate on the cost of solar panels, as well as interest-free loans to the same value.
Singapore
With only 4,500 solar installations to its name, Singapore isn't a leader in solar globally. Yet in terms of residential installations, it's streaks ahead of other countries.
Over 50% of solar power generated in this country comes from residential installations, with public agencies contributing only 3% of the total.
That's because Singapore offers considerable benefits to homeowners who participate in net metering. When you supply solar power to the grid, you receive 75% of the going rate per kilowatt-hour back.
Other incentives include a 35% subsidy on solar panels, as well as a carbon tax for businesses producing high carbon emissions.
Winning With Solar
Financial incentives are fantastic, and long-term savings are even better. Yet, they pale in comparison with ensuring the health and wellbeing of our environment.
After all, we have nowhere else to go, regardless of what space-going entrepreneurs have planned for the future. So, if you're serious about saving money while saving the planet, solar power is the ultimate win-win solution for you.
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