Wednesday, October 12, 2016

Incentives for Energy Efficiency: A Look at Global Practices

Globally, it is undeniable that there has been a proactive approach towards promoting sustainability. Different nations, their respective governments, as well as private organizations, have been incessantly searching for the best ways to protect the environment and promote what is best for it, specifically through the use of renewable energy. In fact, federal and state subsidies have been common in many developed countries, which is a way of encouraging businesses and citizens to be contributory in the quest towards having a cleaner world.

In the rest of this post, we will have a quick look at some of the various federal and state programs to promote renewable energy and energy efficiency, including tax incentives and subsidies that are in place in different countries. These programs are meant to attract governments, states, businesses and entire countries, into considering alternatives to promote clean energy.

United States

When it comes to providing tax incentives for the use of green energy, United States is perhaps one of the best. The Solar Investment Tax Credit is one of the most popular examples of such. This will provide tax credit of up to 30% to eligible residential and commercial users. It is in place until 2023, which means that businesses in the solar industry can expect steady growth in their finances. There is also a Production Tax Credit for those who are engaged in the production of electricity using renewable sources. In addition, there are also various federal and state subsidies that are in place. The US Department of Agriculture, for instance, has a program that helps in energy generation and transmission in rural communities. More so, under the Alternative Fuel Infrastructure Tax Credit, combining 20% of biodiesel in various equipment can make an organization eligible for further tax credits.

Clean Energy Incentive Program - The EPA is providing a Clean Energy Incentive Program (CEIP) to reward early investments in renewable energy generation and demand-side energy efficiency measures that generate carbon-free MWh or reduce end-use energy demand.  State participation in the program is optional.   

The Clean Power Plan is no different, as state participation is optional, based on the level of desire for participation in this program. This Plan was stayed by the Supreme Court until further litigation is resolved. However, it will see its day in court and EPA remains fully confident in its legal merits. The Plan rests on a strong legal and technical foundation and is consistent with Supreme Court decisions, EPA’s statutory authority, and air pollution standards that have been put in place to tackle other pollution problems. More info. on the Clean Power Plan:

Germany

China

Sweden

In order to demonstrate their concern towards environmental sustainability, a plan has been enforced since 2005, which has mainly been aimed towards improving energy efficiency and included more than 180 power-intensive companies. In exchange for their participation in the reduction of their energy use, they have been provided tax credits. The government also provides a fee-based system in order to recognize businesses that have been actively pursuing strategies to reduce greenhouse gas emissions.

Canada

The country’s government has expressed its commitment to reduce greenhouse gas emissions by at least 30% by 2030 compared to its level in 2005. By the same year, the government has vowed to source 90% of its electricity from clean sources. There are various tax incentives in place to encourage wide-scale participation. For instance, there is an Investment Tax Credit for companies performing research and development concerning the use of green energy. The Accelerated Capital Cost Allowance and Canadian Renewable and Conservation Expense are open for eligible businesses, which can effectively lessen their income tax in exchange for the use of renewable energy sources.

Iceland

In this country, the renewable energy that is produced is five times more than what can be consumed by the current population. This means that there is a lot that has yet to be utilized, especially in the form of geothermal and hydro energy. To promote the use of green energy, the country is offering tax credits to investors. BMW is one of the biggest companies to have taken advantage of such. The company noted that their operating costs were reduced to as much as 83% because of the incentives provided by the national government. This was mainly due to the profit tax being reduced from 20 to 15% due to their use of renewable energy and energy efficiency technologies.

Denmark

Under the Green Growth Strategy, the government envisioned protection of the environment and promotion of the agricultural sector. To do this, the government has released 32 billion DKK annually in order to fund planting costs of farmers. They also provided starter fund for organic biogas production. Such federal and state subsidies reflect efforts of the government to help promote green energy in the country. Tax incentives are also in place for users of renewable energy sources, including solar panels and wind turbines.

Please also see: www.greencitytimes.com/Sustainability-News/feed-in-tariffs-simple-incentives-to-further-renewable-energy.html

1 comment:

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