Asia Pacific Renewable Energy Policy Handbook 2012

Asia Pacific Renewable Energy Policy Handbook 2012
Reference Code: GDAE1001P
Publication Date: May 2012
Support Policy Measures Playing a Major Role in

Renewable Energy Deployment in the Asia Pacific Region
The Asia Pacific region has seen a rapid increase in energy
consumption which has been primarily driven by the increased
consumption in the Indian and Chinese markets. This growing
energy demand, increasing concerns over global warming and
the need to diversify energy sources have driven the region
towards an increase use of renewable energy.
Among the major Asian countries, Australia, Japan and New
Zealand have signed the Kyoto Protocol, whilst India and China
have pledged to reduce emissions at the Copenhagen summit.
All the countries in the Asia Pacific region are expected to
continue to invest in the renewable energy sector over the
coming decades and are using the Renewable Portfolio
Standards (RPS), Feed-in Tariffs (FITs), soft loans, tax
incentives and other measures, in order to promote the
renewable energy industry.
The government support measures have led to a significant
increase in renewable energy growth in the region. Different
countries are using various support measures to ensure the
steady growth of the industry.
China has led the development of renewable energy in the

region, fast becoming one of the major players in the global
renewable energy industry. Among recent Asian developments,
China is developing its wind turbine and solar Photovoltaic (PV)
manufacturing industries; this reflects the governments
commitment to renewable energy through a series of new laws
and financial support measures.
India and Australia have also implemented a number of support
measures for the development of renewable energy. The future
growth of renewables in these countries will depend on the
pace of implementation of these measures. The new programs
announced in India are expected to significantly increase the
solar power industry.
The Japanese government has shown its commitment towards
renewables through the implementation of solar FITs and is
considering FITs for other renewable energy sources.
Thailand has announced a number of measures to boost its
biomass industry. The country aims to increase its share of
renewables to 90% by 2020 and to develop as a biofuel
producing hub in the Asia Pacific region.
Most of the measures initiated by governments have received a

positive response and have played a vital role in the
development of the renewable energy industry in each
respective country. The table below details the different policy
measures used by the Asia Pacific nations to promote
renewable energy.
Renewable Power Policy Framework, Asia Pacific, Major Policy Instruments, 2010
Country
Energy
Production
Payments/
investments
or other tax
credits
Sales tax,
energy tax,
excise tax
or VAT
reduction
Feed
inTariff
Renewable
Portfolio
Standard
Capital
subsidies,
grants or
rebates
Australia
China
India
Japan
South
Korea
New
Zealand
Thailand
Tradable
renewable
energy
certificates
Net
Metering
Public
competitive
bidding
Public
investments
loans and
financing
Source: GlobalData
GDAE1001P / Published MAY 2012

Page 1
GlobalData. This report is a licensed product and is not to be copied,
reproduced, shared or resold in any form
China Led the Renewable Energy Industry in the Asia

Pacific Region in 2011
through rapidly diffusing the conditions of the mission

throughout the country.
China has emerged as one of the major players in the global

renewable energy industry and is leading renewable energy
growth in the Asia Pacific region. Driven by government policies
and measures to support growth, China has become the largest
wind power market in the world with a total installed capacity of
60,307 Megawatt (MW) in 2011, overtaking the US. The growth
in the wind power market is due to of the addition of new
installations over the last couple of years, adding 13.8 GW of
wind capacity in 2009 and a further 18,789 MW wind capacity in
2010. China is also trying to establish itself as a major player in
the solar power industry and the government has announced
major support measures. The government has also initiated
support measures for small hydro and biomass facilities. These
moves are expected to promote renewable energy development
in China and increase investments in the sector.
The mission aims to create an enabling policy framework for the

deployment of 20,000 MW of solar power by 2022; and
increase the capacity of grid-connected solar power generation
to 1,000 MW by 2013 and 3,000 MW by 2017, through the
mandatory use of the renewables by utility providers; this will be
backed by a preferential tariff.
During 2011, the Chinese government announced the 12th five

year plan which will promote the development of new energy
industries. It also incorporates specific deployment targets for
renewable energy, including the construction of six onshore and
two coastal and offshore wind projects by 2015, totaling 120
Gigawatt (GW) of hydro power and 70 GW of wind power
capacity. China also aims to develop 5 GW of solar energy
projects. China is expected to continue its strong investments in
the renewable energy industry and the government has
established a target of generating 15% of the countrys
electricity through renewables by 2020.
Australias Amendment to the Renewable Energy Target
Ensure Growth of Large and Small Scale Renewable
Energy Projects
In July 2010, the Australian government announced that it had
decided to split the Renewable Energy Target (RET) scheme
into two parts in order to ensure the long-term, sustainable
growth of both the small-scale and large-scale renewable
energy sectors. From January 2011, the existing RET scheme
was separated into the Small scale Renewable Energy Scheme
(SRES) and the Large scale Renewable Energy Target (LRET).
Combined, the new LRET and SRES are expected to deliver
more renewable energy than the existing 45,000 Gigawatt
hours (GWh) target in 2020.
India to Witness Significant Investments in Solar Energy
over the Next Decade
The Indian Government has planned significant investment in
the solar power industry and launched the Jawaharlal Nehru
National Solar Mission on January 11, 2010. The Mission aims
to develop and deploy solar energy technologies in the country
to achieve parity with the grid power tariff by 2022. The
objective of the National Solar Mission is to establish India as a
global leader in solar energy; the policy aims to achieve this
Japans Feed-in Tariff will Position it as the Next Large

Growth Market
The world renewable energy market has seen a rapid
development over the past few years, however, Japans
renewable energy market has remained in a grounded state
due to its market policies for renewables not being sufficiently
examined or implemented. As a result, during 2011, the
Japanese parliament approved a legislation that will create a
national FIT scheme.
The new law is expected to boost the development of solar,
wind and geothermal projects by mandating the utility providers
to purchase power from renewable energy sources at a rate
fixed by the government.
Hydro Power: a Major Source of Renewable Energy in
Korea
The Korean government has heavily promoted the use of the
green industry. The solar PV market is set to soar in the coming
years as Korea has a generous FIT for the market. The growing
importance of renewable energy in the Korean power market
mix resulted in a total installed capacity of 7,866 MW at the end
of the year 2011. However, among all the renewable sources,
hydro power has contributed most significantly to the renewable
power market in Korea, with a cumulative installed capacity of
6,435 MW in 2011, accounting for 82% of the entire market.
Thailand Aims to Become a Regional Biofuel Hub
Thailand plans to develop its biomass resources and become a
regional biofuel hub. The country has laid down various support
measures to develop renewable energy sources, especially
biofuels. The country has also established incentives to
promote the use of biofuels in the domestic market. In order to
promote the use of E20 gasoline (20% Ethanol, 80% Gasoline),
the government has set the retail price of E20 gasoline lower
than that of E10 gasoline(10% ethanol and 90% gasoline). The
retail price of E20 gasoline has been set at 2THB/l ($0.03)
lower than E10 gasoline. . The government is expected to come
up with other incentives for the biofuel industry in the country in
order to achieve its target of developing Thailand as a regional
biofuel hub and a major export center.

Page 2
Table of Contents
Table of Contents ............................................................................................................................ 3

1.1 List of Tables............................................................................................................................. 8
1.2 List of Figures.......................................................................................................................... 10
2 Introduction ................................................................................................................................... 11
2.1 Renewable Energy Policy Framework, Global, Overview .......................................................... 11
2.2 Renewable Energy Policy Framework, Global, Major Policy Measures ...................................... 11
2.2.1
Feed-in Tariff Program.................................................................................................... 11
2.2.2
Renewable Portfolio Standards ....................................................................................... 11
2.2.3
Tradable Renewable Energy Certificates Systems ........................................................... 12
2.2.4
Capital Subsidies, Grants/Rebates .................................................................................. 12
2.2.5
Energy Production Payments/Investments or Other Tax Credits....................................... 12
2.2.6
Tax Reductions .............................................................................................................. 12
2.2.7
Net Metering................................................................................................................... 12
2.2.8
Public Investment Loans ................................................................................................. 12
2.3 GlobalData Report Guidance ................................................................................................... 13
3 Renewable Energy Regulatory Framework, Australia...................................................................... 14
3.1 Renewable Energy Regulatory Framework, Australia, Overview ............................................... 14
3.2 Renewable Energy Policy Framework, Australia, Federal Policies and Incentives...................... 16
3.2.1
Renewable Energy Target Scheme ................................................................................. 16
3.2.2
Small-Scale Renewable Energy Scheme......................................................................... 18
3.2.3
Large-scale Renewable Energy Target............................................................................ 20
3.2.4
Renewable Energy and Energy Efficiency Partnership ..................................................... 22
3.2.5
Renewable Energy Demonstration Program (REDP)........................................................ 22
3.2.6
Clean Energy Initiative .................................................................................................... 22
3.2.7
Green Loans Program for Households............................................................................. 23
3.2.8
Renewable Power Percentage ........................................................................................ 23
3.2.9
Renewable Energy Future Fund...................................................................................... 23
3.2.10 Renewable Energy Equity Fund ...................................................................................... 25
3.2.11 Connecting Renewables Initiative.................................................................................... 25
3.2.12 Renewable Energy Venture Capital Fund ........................................................................ 25
3.2.13 Climate Change Grant Program ...................................................................................... 25
3.2.14 Community Energy Grants Program ................................................................................ 25
3.3 Financial Incentives and Policy Support for Solar Power, Australia, Federal Incentives .............. 26
3.3.1
The Solar Cities Program................................................................................................ 27
3.3.2
Green Vouchers for Schools/National Solar Schools Program.......................................... 27
3.3.3
The Solar Homes and Communities Plan ........................................................................ 28
3.3.4
Australian Solar Institute ................................................................................................. 28
3.4 Financial Incentives and Policy Support for Wind, Australia, Federal Incentives......................... 29
3.4.1
Wind Energy Forecasting Capability ................................................................................ 29
3.4.2
National Code for Wind Farm Construction ...................................................................... 30
3.4.3
Mechanisms Supporting Grid-Connected Wind Power ..................................................... 30
3.5 Financial Incentives and Policy Support for Geothermal, Australia, Federal Incentives............... 30
3.5.1
Geothermal Industry Development Framework ................................................................ 30
3.5.2
Geothermal Drilling Program ........................................................................................... 30
3.6 Financial Incentives and Policy Support for Bioenergy, Australia, Federal Incentives ................. 31
3.6.1
Ethanol Production Grants Program ................................................................................ 32
3.6.2
Biofuels Capital Grants Program ..................................................................................... 32
3.6.3
Methane to Markets Partnership...................................................................................... 32
3.6.4
Energy Grants Credit Scheme Alternative Fuels............................................................ 32
3.6.5
Fuel Tax Reforms ........................................................................................................... 32
3.6.6
Second Generation Biofuels Research and Development Program................................... 33
3.7 Financial Incentives and Policy Support for Energy Efficiency, Australia, Federal Incentives ...... 34
3.7.1
Energy Efficiency Information Grants............................................................................... 34
3.7.2
Energy Savings Initiative................................................................................................. 34
3.7.3
Low Carbon Communities ............................................................................................... 34
3.7.4
Green Precincts Fund ..................................................................................................... 35
3.7.5
Renewable Energy Bonus Scheme ................................................................................. 35
3.7.6
Tax Breaks for Green Buildings....................................................................................... 35
3.8 Renewable Energy Policy Framework, Australia, State Level Policies and Incentives ................ 36

Page 3
3.8.1
South Australia ............................................................................................................... 36
3.8.2
New South Wales ........................................................................................................... 36
3.8.3
Victoria........................................................................................................................... 37
3.8.4
Tasmania ....................................................................................................................... 38
3.8.5
Queensland.................................................................................................................... 38
3.8.6
Australian Capital Territory.............................................................................................. 38
3.8.7
Western Australia ........................................................................................................... 39
4 Renewable Energy Regulatory Framework, China .......................................................................... 41
4.1 Renewable Energy Regulatory Framework, China, Overview.................................................... 41
4.2 Renewable Energy Policy Framework, China, Major Policies and Incentives ............................. 43
4.2.1
Renewable Energy Law .................................................................................................. 45
4.2.2
Medium and Long Term Development Plan for Renewable Energy................................... 48
4.2.3
4.2.4
International Science and Technology Cooperation Program for New and Renewable
Energy ........................................................................................................................... 48
4.2.5
Shandong Province Village Renewable Energy Regulations............................................. 49
4.2.6
New Carbon Intensity Target........................................................................................... 49
th
4.2.7
The 12 Five-Year Plan .................................................................................................. 49
4.3 Financial Incentives and Policy Support for Solar Power, China ................................................ 49
4.3.1
Golden Sun Program ...................................................................................................... 50
4.3.2
The BIPV Subsidy Program............................................................................................. 51
4.3.3
Feed-In Tariff for Solar Projects....................................................................................... 51
4.3.4
Solar PV Bidding Program .............................................................................................. 52
4.3.5
Subsidies for Solar PV in Rural Areas.............................................................................. 52
4.3.6
R&D support for Solar PV ............................................................................................... 52
4.3.7
Shandong Province Energy Fund .................................................................................... 53
4.3.8
Shandong Provinces Sunshine Plan................................................................................ 53
4.4 Financial Incentives and Policy Support for Wind, China ........................................................... 53
4.4.1
Feed-in Tariffs for Wind Power ........................................................................................ 54
4.4.2
Domestic Content Requirement....................................................................................... 55
4.4.3
Wind Power Concession Program ................................................................................... 55
4.4.4
Low Interest Rate Loans ................................................................................................. 55
4.4.5
VAT and Import Tariff Rebate on Key Wind Turbine Components..................................... 55
4.4.6
Market Entry Standards for Wind Equipment Manufacturers............................................. 55
4.4.7
Interim Measure on the Management of Offshore Wind Farms ......................................... 55
4.4.8
Offshore Wind Development Plan.................................................................................... 56
4.4.9
Hainan Province Plan for the Construction of Wind Farms................................................ 56
4.4.10 Provincial Incentives for Wind ......................................................................................... 56
4.5 Financial Incentives and Policy Support for Hydro, China.......................................................... 57
4.5.1
Brightness Program ........................................................................................................ 57
4.5.2
Financial Incentives for Small Hydropower....................................................................... 57
4.5.3
Rural Electrification Policies for Small Hydropower .......................................................... 58
4.6 Financial Incentives and Policy Support for Bioenergy, China ................................................... 58
4.6.1
Feed-in Tariffs for Biomass ............................................................................................. 58
4.6.2
Support for Biomass Power Generation........................................................................... 58
4.6.3
Support for Biogas Projects............................................................................................. 58
4.6.4
National Rural Biogas Construction Plan 2003-2010 ........................................................ 59
4.6.5
Financial Incentives for Ethanol....................................................................................... 59
4.6.6
Banning of Grain based Ethanol...................................................................................... 59
4.7 Financial Incentives and Policy Support for Energy Efficiency, China ........................................ 59
4.7.1
Green Lighting................................................................................................................ 59
4.7.2
Subsidy for Bulk Purchase of CFL ................................................................................... 59
4.7.3
National Building Energy Standard .................................................................................. 60
4.7.4
Efficiency Upgrade for Appliance Production and Public Lighting...................................... 60
4.7.5
Energy Conservation in Buildings .................................................................................... 60
5 Renewable Energy Regulatory Framework, India............................................................................ 61
5.1 Renewable Energy Regulatory Framework, India, Overview ..................................................... 61
5.2 Renewable Energy Regulatory Framework, India, Major Policies .............................................. 63
5.2.1
Electricity Act 2003 ......................................................................................................... 63
5.2.2
Integrated Energy Policy ................................................................................................. 63
5.2.3
5.2.4
Tariff Policy 2006............................................................................................................ 65
5.2.5
Ladakh Renewable Energy Initiative................................................................................ 65
5.2.6
Remote Village Electrification Program............................................................................ 66

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5.2.7
Central Financial Assistance for Renewable Projects ....................................................... 66
5.2.8
Renewable Energy Certificates ....................................................................................... 70
5.2.9
Foreign Investment Policy ............................................................................................... 72
5.3 Financial Incentives and Policy Support for Solar, India ............................................................ 73
5.3.1
National Solar Mission .................................................................................................... 73
5.3.2
Generation Based Incentives .......................................................................................... 76
5.3.3
Central Financial Assistance for Solar Power Projects ..................................................... 77
5.3.4
India Semiconductor Policy ............................................................................................. 77
5.3.5
Demonstration and Promotion of Solar PV Devices/Systems in Urban Areas and Industry 78
5.3.6
Development of Solar Cities Scheme .............................................................................. 79
5.3.7
Energy Efficient Solar/Green Buildings Scheme............................................................... 81
5.4 Financial Incentives and Policy Support for Wind, India ............................................................ 81
5.4.1
Central Government Incentives for Wind Power ............................................................... 82
5.4.2
Generation Based Incentive for Grid Connected Wind Power Projects.............................. 83
5.4.3
Financing Guidelines for Wind Energy Projects................................................................ 84
5.4.4
State Government Policies.............................................................................................. 85
5.5 Financial Incentives and Policy Support for Bioenergy, India..................................................... 85
5.5.1
Biomass Power and Bagasse Co-generation Program ..................................................... 85
5.5.2
Central Financial Assistance (CFA) for Biomass Power Projects ...................................... 86
5.5.3
Capital Subsidy for Biomass Gasifiers and Biomass Co-generation Projects..................... 87
5.5.4
Ethanol Production ......................................................................................................... 87
5.5.5
National Biomass Cookstove Initiative ............................................................................. 87
5.5.6
National Biofuel Policy .................................................................................................... 87
5.5.7
Ethanol Blending Program .............................................................................................. 88
5.5.8
National Biodiesel Mission .............................................................................................. 88
5.6 Financial Incentives and Policy Support for Hydropower, India.................................................. 88
5.6.1
Small Hydropower Program (SHPP)................................................................................ 88
5.6.2
Central Financial Assistance for Hydro Power Projects .................................................... 89
5.6.3
Financial Support to Private Sector, Joint Sector and Co-operative Society ...................... 89
5.6.4
Financial Support to State Government, Central Government and Public Sector Units ...... 90
5.6.5
Financial Support for Renovation and Modernization of Small Hydro Projects ................... 90
5.7 Financial Incentives and Policy Support for Energy Efficiency, India.......................................... 90
5.7.1
National Building Code.................................................................................................... 91
5.7.2
Energy Conservation Building Codes .............................................................................. 91
5.7.3
Environmental Impact Assessment.................................................................................. 91
5.7.4
Green Building Rating Systems....................................................................................... 91
5.7.5
Incentives Offered by State/Central Government ............................................................. 91
6 Renewable Energy Regulatory Framework, Japan.......................................................................... 92
6.1 Renewable Energy Regulatory Framework, Japan, Overview ................................................... 92
6.2 Renewable Energy Regulatory Framework, Japan, Major Policies ............................................ 93
6.2.1
Establishment of NEDO .................................................................................................. 93
6.2.2
New Renewable Energy Target....................................................................................... 93
6.2.3
New 2010 Renewable Energy Targets............................................................................. 94
6.2.4
Special Measures law for Promoting the Use of New Energy............................................ 94
6.2.5
Renewables Portfolio Standard (RPS) System................................................................. 94
6.2.6
National Energy Strategy 2006........................................................................................ 95
6.2.7
Comprehensive Review of Japanese Energy Policy......................................................... 95
6.2.8
Japan Renewable Energy Policy Platform ....................................................................... 96
6.2.9
Feed-in Tariffs for Renewable Energy.............................................................................. 97
6.2.10 Support for Deployment of New and Renewable Energy .................................................. 97
6.2.11 Subsidy for R&D for New and Renewable Energy ............................................................ 97
6.3 Financial Incentives and Policy Support for Solar Power, Japan................................................ 99
6.3.1
Solar Power in Government Office Buildings.................................................................. 100
6.3.2
Subsidy for Residential PV Systems.............................................................................. 100
6.3.3
New Purchase System for Solar Power-Generated Electricity ........................................ 100
6.3.4
Fiscal and Tax Incentives for Solar PV Generation......................................................... 101
6.3.5
Local Government Initiatives ......................................................................................... 101
6.4 Financial Incentives and Policy Support for Wind, Japan......................................................... 101
6.4.1
Subsidy Project for Grid Interconnection of Wind Power Generation ............................... 102
6.4.2
Research and Development of Next-Generation Wind Power Generation Technology .... 102
6.5 Financial Incentives and Policy Support for Geothermal, Japan............................................... 102
6.5.1
Project on Geothermal Power Generation Development................................................. 102
6.6 Financial Incentives and Policy Support for Hydro, Japan ....................................................... 103
6.6.1
Project for Developing Small and Medium-sized Hydroelectric Power Plants................... 103

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6.7 Financial Incentives and Policy Support for Bioenergy, Japan ................................................. 103
6.7.1
Biofuel Targets ............................................................................................................. 103
6.7.2
Government Incentives for Biofuels ............................................................................... 103
6.7.3
Bio-diesel Policy ........................................................................................................... 104
6.7.4
Methane to Markets Partnership.................................................................................... 104
6.7.5
Ethanol (E3) Production Demonstration......................................................................... 104
6.8 Financial Incentives and Policy Support for Energy Efficiency, Japan ...................................... 104
6.8.1
Subsidies for Energy Efficient Hot Water and Air Conditioning Systems.......................... 104
6.8.2
Financial or Tax Incentives for Energy Efficient Buildings ............................................... 105
6.8.3
Energy Conservation and Recycling Assistance Act....................................................... 105
6.8.4
Energy Efficiency Standards ......................................................................................... 105
7 Renewable Energy Regulatory Framework, South Korea .............................................................. 106
7.1 Renewable Energy Regulatory Framework, South Korea, Overview........................................ 106
7.2 Renewable Energy Regulatory Framework, South Korea, Major Policies................................. 108
7.2.1
Green Growth Policy..................................................................................................... 108
7.2.2
Subsidy program (Renewable energy demonstration and deployment) ........................... 108
7.2.3
Research Funding for the Development of Renewable Energy Sources.......................... 108
7.2.4
Renewable Energy and Energy Efficiency Partnership ................................................... 108
7.2.5
The Promotional Law of New and Renewable Energy Development, Use and Dissemination
.................................................................................................................................... 108
7.2.6
Second Basic Plan for New Renewable Energy Technology Development, Use and
Deployment .................................................................................................................. 109
7.2.7
Certification for New and Renewable Energy Facilities ................................................... 109
7.2.8
Tax Audit Exemption..................................................................................................... 109
7.2.9
National Energy Plan 2008-2030................................................................................... 109
7.2.10 One Million Green Homes Program ............................................................................... 109
7.2.11 Feed-in Tariff Program.................................................................................................. 110
7.2.12 Renewable Portfolio Standards ..................................................................................... 112
7.2.13 Renewable Portfolio Agreement .................................................................................... 112
7.2.14 Mandatory Use for Public Buildings ............................................................................... 112
7.2.15 Methane to Markets Partnership.................................................................................... 112
8 Renewable Energy Policy Framework, Thailand ........................................................................... 113
8.1 Renewable Energy Policy Framework, Thailand, Overview ..................................................... 113
8.2 Renewable Energy Policy Framework, Thailand, Major Policies .............................................. 113
8.2.1
National Renewable Energies Development Plan 2008-2022 ......................................... 114
8.2.2
Tax Incentives through Board of Investment .................................................................. 124
8.2.3
Technical Assistance for Renewable Energy Projects .................................................... 124
8.2.4
Investment Grants ........................................................................................................ 125
8.2.5
Soft Loans - Revolving Fund ......................................................................................... 125
8.2.6
Energy Service Company Fund..................................................................................... 125
8.2.7
Adder Feed-in Premiums .............................................................................................. 125
8.2.8
Energy Conservation Program ...................................................................................... 126
8.2.9
Small Power Producer and Very Small Power Producers Program ................................. 127
8.2.10 Strategic Plan for Renewable Energy Development ....................................................... 128
8.2.11 Tax Incentive for Energy Conservation .......................................................................... 128
9 Renewable Energy Policy Framework, New Zealand .................................................................... 129
9.1 Renewable Energy Policy Framework, New Zealand, Overview .............................................. 129
9.2 Renewable Energy Policy Framework, New Zealand, Major Policies ....................................... 129
9.2.1
New Zealand Energy Efficiency and Conservation Strategy (NZEECS) .......................... 129
9.2.2
The Energy Efficiency and Conservation Strategy, 2007 ................................................ 130
9.2.3
Electricity Industry Act 2010 .......................................................................................... 133
9.2.4
New Zealand, Emissions Trading Scheme..................................................................... 133
9.2.5
New Zealand, Climate Change and Sustainability Agenda ............................................. 133
9.2.6
Warm Up New Zealand Heat Smart............................................................................... 133
9.2.7
Solar and Heat Pump Water Heating............................................................................. 134
9.2.8
Efficient Lighting Strategy.............................................................................................. 134
9.2.9
Energy Saving Scheme: Solar Heaters Support............................................................. 134
9.2.10 Renewable Energy and Energy Efficiency Partnership ................................................... 134
9.2.11 Proposed National Policy Statement for Renewable Electricity Generation ..................... 134
9.3 Financial Incentives and Policy Support for Solar Power, New Zealand ................................... 135
9.3.1
Grants for Public Buildings ............................................................................................ 135
9.4 Financial Incentives and Policy Support for Wind, New Zealand.............................................. 135
9.4.1
Resource Management Act 1991 .................................................................................. 137
9.4.2
Project to Reduce Emissions......................................................................................... 137

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9.5 Financial Incentives and Policy Support for Bioenergy, New Zealand ...................................... 137
9.5.1
Biodiesel Grant Scheme ............................................................................................... 137
9.5.2
Wood Energy, Grants ................................................................................................... 137
9.5.3
New Zealand Bioenergy Initiative .................................................................................. 138
9.5.4
Low Carbon Energy Technologies Fund ........................................................................ 138
9.5.5
Ethanol Manufacturing Regulations ............................................................................... 138
10 Renewable Energy Policy Framework, Vietnam ............................................................................ 139
10.1 Renewable Energy Policy Framework, Vietnam, Overview...................................................... 139
10.2 Renewable Energy Policy Framework, Vietnam, Major Policies............................................... 139
10.2.1 Electricity Law .............................................................................................................. 139
10.2.2 The Environmental Law ................................................................................................ 139
10.2.3 Decision 37 .................................................................................................................. 139
11 Renewable Energy Policy Framework, Taiwan ............................................................................. 141
11.1 Renewable Energy Policy Framework, Taiwan, Major Policies ................................................ 141
11.1.1 Renewable Energy Development Act ............................................................................ 141
11.1.2 Feed-in Tariffs .............................................................................................................. 142
11.1.3 Renewable Energy Incentives ....................................................................................... 143
11.1.4 Green Energy Sunrise Program .................................................................................... 143
11.1.5 National Science and Technology Program - Energy...................................................... 144
12 Appendix ..................................................................................................................................... 145
12.1 Abbreviations ........................................................................................................................ 145
12.2 Bibliography .......................................................................................................................... 147
12.3 GlobalDatas Methodology..................................................................................................... 149
12.4 Coverage .............................................................................................................................. 149
12.5 Secondary Research ............................................................................................................. 149
12.6 Primary Research.................................................................................................................. 150
12.7 Contact Us ............................................................................................................................ 150
12.8 Disclaimer ............................................................................................................................. 150

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Table 49:
Table 50:
Renewable Energy Target, Australia, Annual Renewable Power Target, GWh, 2010-2030.... 17
Small-scale Renewable Energy Scheme, Australia, Maximum Level of Support by City, 201119
Small-scale Renewable Energy Scheme, Australia, Solar Credits, 2009-2013....................... 19
New Large-scale Renewable Energy Target (LRET), Annual Targets, Australia, (GWh), 20112030................................................................................................................................... 21
Renewable Energy Future Fund, Australia, Funding for Advanced Solar Energy Technologies,
2010................................................................................................................................... 24
Renewable Energy Demonstration Program, Australia, Funding for Solar Projects, 2010 ...... 24
Solar Homes and Communities Plan, Australia, Summary Of Rebates And Grants ............... 28
Renewable Power Policy Framework, Asia Pacific, Major Policy Instruments Supporting the
Industry, 2010..................................................................................................................... 31
Biofuels Excise Rates, Australia, 2010................................................................................. 33
Effective Tax Rates For Biofuels, Australia, 2010 ................................................................. 33
Solar Power Market, Australia, Summary of State-level Feed-in Tariff Programs, 2011 ......... 36
Residential Feed-in Tariffs, Western Australia, 2011 ............................................................ 39
Renewable Energy Buyback Rates, Western Australia, 2011 ............................................... 39
Major Renewable Energy Law Implementation Timelines, China, 2010................................. 43
Renewable Energy Law, China, Major Regulations, 2005-2006 ............................................ 45
Renewable Energy Targets, China, 2006-2020 .................................................................... 46
Jiangsu Solar PV Preferential Tariffs, China, 2009-2011 ...................................................... 51
Wind Power Market, China, List of Major Policies................................................................. 53
Wind Power Market, China, Provincial Incentives................................................................. 56
Financial Incentives for Small Hydropower, China................................................................ 57
Rural Electrification Policies for Small Hydropower, China.................................................... 58
Renewable Power Market, India, RPS Specified by SERCs, 2010-2013 ............................... 64
Renewable Energy Market, India, CFA for Off-grid Renewable Energy Programs, 2011........ 66
Renewable Power Market, India, CFA for Grid Interactive Renewable Energy Programs, 2010
.......................................................................................................................................... 67
Renewable Power Market, India, IREDA Loan Disbursals, 2005-2012.................................. 68
Renewable Power Market, India, Loans Sanctioned by IREDA, 2006-2011........................... 68
Renewable Power Market, India, Loan Disbursements by IREDA, 2006-2011....................... 69
Renewable Power Market, India, Capacity Sanctioned by IREDA, 2006-2011....................... 69
Renewable Power Market, India, REC Trading, Volume and Price, IEX, March to December
2011................................................................................................................................... 71
Renewable Power Market, India, REC Trading, Volume and Price, PXIL, March to December
2011................................................................................................................................... 72
Solar Power Market, India, NSM, Phase Wise Targets, 2010-2022....................................... 74
Solar Power Market, India, NSM Mission Targets, Funding Requirements, INR billion........... 75
Solar Power Market, India, Selected by NVVN, Phase I, Batch I and Batch II........................ 76
Solar Power Market, India, CFA for Off-Grid Projects ........................................................... 77
Solar Power Market, India, CFA for Off-Grid Projects ........................................................... 77
Solar Power Market, India, Applications Received Under the Semiconductor Policy.............. 78
Solar Power Market, India, Solar Cities Program, State List of 48 Cities with In-Principle
Approval, 2011 ................................................................................................................... 80
Custom Duty for Wind Equipment and Components, India, 2010 .......................................... 82
Wind Power Market, India, Guidelines for Projects Financed through IREDA ........................ 84
CFA for Biomass Power Project and Bagasse Cogeneration Projects by
Private/Joint/Coop./Public Sector Sugar Mills, India ............................................................. 86
CFA for Bagasse Cogeneration Project in Existing Cooperative Sector Sugar Mills Employing
Boiler Modifications, India ................................................................................................... 86
Capital Subsidy for Biomass Gasifiers and Biomass Co-generation Projects, India................ 87
Renewable Energy Market, India, Financial Support for Biofuel ............................................ 87
Small Hydropower Market, India, States Project Statuses, 2010-2011 ................................. 88
CFA for Hydro Power Project, India ..................................................................................... 89
Financial Support for Hydropower, India, Support for Private Sector, Joint Sector and Cooperative Society ................................................................................................................ 89
Financial Support for Hydropower, India, Support to Private Sector, Joint Sector and Cooperative Society ................................................................................................................ 90
Financial Support for Hydropower, India, Support to Government/State /Public Sector for
Renovation and Modernization ............................................................................................ 90
Utilization Targets For New Energy, Japan, TWh, 2003-2014 ............................................... 95
JREPP Vision, Japan, Share of Renewables in Electricity Generation, 2050......................... 97

Page 8
Table 51: New Energy Facility Introduction Project, Japan, Eligible Systems and Requirements For Local
Government........................................................................................................................ 98
Table 52: Solar PV Feed-in Tariff, South Korea, KRW/kWh, 2010-2011 ............................................. 110
Table 53: Feed-in Tariff for Wind, South Korea, KRW/kWh, 2009-2011.............................................. 111
Table 54: Feed-in Tariff for Mini-hydro, South Korea, KRW/kWh, 2010 .............................................. 111
Table 55: Renewable Portfolio Standards, South Korea, Targets (%), 2012-2020............................... 112
Table 56: Renewable Energy Development Plan, Thailand, Interim Targets by Phase, 2008-2022...... 114
Table 57: Renewable Energy Development Plan, Thailand, Contribution of Renewable Energy and
Natural Gas Vehicles to Total Consumption, ktoe, 2011-2022 ............................................ 116
Table 58: Renewable Energy Development Plan, Thailand, Contribution of Renewable Energy and
Natural Gas Vehicles (NGV) to Total Consumption, ktoe, 2011-2022.................................. 116
Table 59: Renewable Energy Development Plan, Thailand, Target for Renewable Energy by Source
Type, ktoe, 2011-2022 ...................................................................................................... 117
Table 60: Renewable Energy Development Plan, Thailand, Target for Renewable Heat by Source Type,
ktoe, 2011-2022................................................................................................................ 118
Table 61: Renewable Energy Development Plan, Thailand, Target for Renewable Power by Source
Type, MW, 2011-2022....................................................................................................... 119
Table 62: Renewable Energy Development Plan, Thailand, Target for Biofuels, ml/day, 2011-2022.... 120
Table 63: Renewable Energy Development Plan, Thailand, Contribution by Alternative Sources to the
Total Target, %, 2022 ....................................................................................................... 121
Table 64: Renewable Energy Development Plan, Thailand, Promotion Measures by Phase, 2008-2022
........................................................................................................................................ 123
Table 65: Adder Feed-in Premiums, Thailand, Premium for Renewable Energy Technologies, THB/kWh,
2011................................................................................................................................. 126
Table 66: Energy Wise Business, New Zealand, Summary of Actions................................................ 131
Table 67: Energy Wise Business, New Zealand, Renewable Energy Program..................................... 131
Table 68: Energy Wise Transport, New Zealand, Developing and Adopting Renewable Fuels ............ 132
Table 69: Energy Efficient and Renewable Electricity System, New Zealand, Promoting the Uptake of
Renewable Electricity........................................................................................................ 132
Table 70: Wind Power Market, Power Generation and Share in Total Power Generation Mix, New
Zealand , GWh, 2007-2011 ............................................................................................... 136
Table 71: Bioenergy Initiative, New Zealand, Government Funding Available , 2007-2011.................. 138
Table 72: Feed-in Tariff, Taiwan, TWD/kW, 2011 .............................................................................. 142
Table 73: Feed-in Tariff for Solar PV, Taiwan, TWD/kW, 2012........................................................... 143
Table 74: National Science and Technology Program - Energy, Taiwan, Budget Allocation, TWDm,
20092013 ....................................................................................................................... 144
Table 75: Abbreviations.................................................................................................................... 145
Table 76: Bibliography List ............................................................................................................... 147

Page 9
1.2
List of Figures
Figure 1: Renewable Power Market, Australia, Impact Analysis of Renewable Energy Policies, 20002012................................................................................................................................... 15
Figure 2: Renewable Power Market, Australia, Impact on Applicable Renewable Power Sources......... 16
Figure 3: Renewable Energy Target, Australia, Annual Renewable Power Target, GWh, 2010-2030.... 17
Figure 4: Small-scale Renewable Energy Scheme, Process Diagram, Australia, 2011......................... 18
Figure 5: Large-scale Renewable Energy Target, Process Diagram, Australia, 2011 ........................... 20
Figure 6: New Large-scale Renewable Energy Target (LRET), Annual Targets, Australia, (GWh), 20112030................................................................................................................................... 21
Figure 7: Solar PV Power Market, Australia, Annual Capacity Additions, MW, 2001-2011.................... 26
Figure 8: Wind Power Market, Australia, Cumulative Capacity, MW, 2001-2011 .................................. 29
Figure 9: Renewable Power Market, China, Impact Analysis of Major Policies, 2004-2012................... 42
Figure 10: Renewable Power Market, China, Policy Impact on Applicable Renewable Power Sources... 42
Figure 11: Solar PV Power Policy, China, Annual Capacity Addition, MW, 2001-2011 ........................... 50
Figure 12: Wind Power Market, China, Annual Capacity Addition, MW, 2001-2011................................ 54
Figure 13: Renewable Power Policy, India, Impact Analysis of Policies, 2003-2012............................... 62
Figure 14: Renewable Power Policy, India, Policy Impact on Applicable Renewable Power Sources...... 62
Figure 15: Renewable Power Market, India, REC Trading, Volume and Price, IEX, March to December
2011................................................................................................................................... 70
Figure 16: Renewable Power Market, India, REC Trading, Volume and Price, PXIL, March to December
2011................................................................................................................................... 71
Figure 17: Solar PV Power Policy, India, Annual Capacity Addition, MW, 2001-2011............................. 73
Figure 18: Solar Power Market, India, Projects Selected by NVVN, Phase I, Batch I and Batch II........... 75
Figure 19: Wind Power Policy, India, Annual Capacity Addition, MW, 2001-2011 .................................. 82
Figure 20: Renewable Power Market, Japan, Impact Analysis of Policies, 2000-2012............................ 92
Figure 21: Renewable Power Market, Japan, Policy Impact on Applicable Renewable Power Sources .. 93
Figure 22: Utilization Targets For New Energy, Japan, TWh, 2003-2014 ............................................... 94
Figure 23: JREPP Vision, Japan, Share of Renewables in Electricity Generation, 2050......................... 96
Figure 24: Solar PV Power Market, Japan, Annual Capacity Addition, MW, 2001-2011 ....................... 100
Figure 25: Wind Power Market, Japan, Annual Capacity Addition, MW, 2001-2011 ............................. 102
Figure 26: Renewable Power Market, South Korea, Impact Analysis of Various Policies, 1992-2012 ... 107
Figure 27:Renewable Power Market, South Korea, Policy Impact on Applicable Renewable Power
Sources............................................................................................................................ 107
Figure 28: Renewable Energy Development Plan, Thailand, Contribution of Alternative Energy Sources to
Total Consumption, ktoe, 2011-2022 ................................................................................. 115
Figure 29: Renewable Energy Development Plan, Thailand, Contribution of Renewable Energy and
Natural Gas Vehicles (NGV) to Total Consumption, ktoe, 2011-2022.................................. 116
Figure 30: Renewable Energy Development Plan, Thailand, Target for Renewable Energy by Source
Type, ktoe, 2011-2022 ...................................................................................................... 117
Figure 31: Renewable Energy Development Plan, Thailand, Target for Renewable Heat by Source Type,
ktoe, 2011-2022................................................................................................................ 118
Figure 32: Renewable Energy Development Plan, Thailand, Target for Renewable Power by Source
Type, MW, 2011-2022....................................................................................................... 119
Figure 33: Renewable Energy Development Plan, Thailand, Target for Biofuels, ml / day, 2011-2022.. 120
Figure 34: Renewable Energy Development Plan, Thailand, Contribution by Alternative Sources to the
Total Target, %, 2022 ....................................................................................................... 121
Figure 35: Wind Power Market, Power Generation and Share in Total Power Generation Mix, New
Zealand, GWh, 2007-2011 ................................................................................................ 136
Figure 36: National Science and Technology Program - Energy, Taiwan, Budget Allocation, TWDm,
20092013 ....................................................................................................................... 144

Page 10
Introduction
2.1
Renewable Energy Policy Framework, Global, Overview
In the late nineties huge investments were made in the renewable energy sector by countries such as the
US, Germany, Spain, India, and the UK in order to enhance renewable power generating capacity.
Renewable energy provides an answer to two major issues the world is facing today: global warming and
diminishing fossil fuel reserves.
Renewable energy is a clean energy generally emitting no, or very small amounts of, Carbon Dioxide
(CO2). The inexhaustible nature of these resources ensures a never ending supply. These factors have
forced the major countries of the world to shift their focus towards renewable energy sources. Today,
renewables make up the fastest-growing energy industry in the world and have the potential to meet half
of the worlds energy needs by 2050.
Renewable energy has the potential to renew the global economy and it is policy-makers who are
responsible for bringing about this change. One major challenge in the deployment of renewable energy is
the fact that it is expensive in comparison to conventional fuels. In order to make renewable energy
competitive, it is necessary for governments to provide support in the form of favorable policies and
incentives.
In this context, governments are establishing regulatory frameworks, policies and incentives to develop
the renewable sector. Most countries are supporting renewable sources in order to aid recovery from the
economic downturn. Renewable Portfolio Standards (RPS) or quota obligations and FITs are the two
most prominent support mechanisms implemented by countries around the world that are driving the
renewable energy market development. Most of the countries promoting renewable energy offer either
one or both of these policy measures. The major difference between the two policy processes is that RPS
is quantity-oriented while FIT is a price-oriented policy promoting renewable energy.
Other incentives, such as capital subsidies, grants, rebates, tax credits, tax exemptions, loans at reduced
interest rates (financing), net metering, Renewable Energy Certificates (RECs) and public competitive
bidding are also offered by major countries to promote renewable sources.
2.2
2.2.1
Renewable Energy Policy Framework, Global, Major Policy Measures

Feed-in Tariff Program
FITs offer qualifying renewable energy generators a fixed-price contract over a specified term with
particular operating conditions. Tariffs are often distinguished on the basis of the type of technology,
resource quality, or size, and may decrease on a set schedule over time. FITs reduce the risk involved in
the renewable energy market by offering a fixed tariff to renewable energy generating facilities over a
fixed time period.
FITs have been the primary tool for financing renewable energy projects in both North and South
America. The tariffs have been quite successful in increasing the use of renewables in countries such as
the US and Canada. In addition, a number of countries such as Germany, France, and Italy have been
offering FITs to promote renewable energy over the past few years. The support level offered by these
tariffs differs from country to country.
2.2.2
Renewable Portfolio Standards
RPS is a policy which mandates the providers of electricity to source a percentage of their electricity from
renewable energy sources (such as solar, wind and geothermal) and supply it to the end users. The RPS
mechanism uses a target or standard for renewables that is governed and determined by policy
regulations. The renewable power producers obtain certificates for every unit of power they generate
which they can sell, along with the electricity produced, to transmission companies. These companies
then transfer the certificates to the regulatory body to indicate fulfillment of their regulatory obligations. In
the US, respective state governments have taken an active role in developing the infrastructure for
promoting renewable energy with the implementation of this program. In certain cases, RPS has the
provision for various penalties for non-compliance.

Page 11
2.2.3
Tradable Renewable Energy Certificates Systems
Many countries have tradable REC systems. These certificates are provided for generating renewable
electricity and can be traded in the market.
2.2.4
Capital Subsidies, Grants/Rebates
Capital subsidies, grants or rebates are the most common incentives provided for renewable energy
worldwide. These subsidies, grants or rebates are provided in various amounts in different countries for
the installation of renewable energy systems in offices, commercial places and residences with the aim of
promoting renewable energy.
2.2.5
Energy Production Payments/Investments or Other Tax Credits
Energy production payments/investments or other tax credits are also important instruments in the
deployment of renewables. Many countries offer different tax credits in order to increase the profitability of
the renewable energy business.
2.2.6
Tax Reductions
Tax reductions also make renewable energy attractive. Each country offers different types of tax
reductions to make renewable energy more profitable. The reductions are offered in the form of a sales
tax, energy tax, excise tax or VAT reductions, varying from country to country.
2.2.7
Net Metering
Net metering laws were introduced as an essential pre-condition law for grid-connected renewable
energy. The law allows electric meters to run backwards when an on-site renewable facility is generating
more power than it is consuming. Most of these laws were written to allow the facility owner to receive
credit for power generated and consumed for up to one year. This law benefits producers whose system
can generate power at different times of day to when power is actually needed. It also benefits customers
with systems that produce excessive power during certain months of the year and insufficient power
during other months. This allows customers to use their equipment on the basis of their average and
annual consumption rather than their average daily consumption. Net metering is very effective in
developing small renewable energy facilities.
2.2.8
Public Investment Loans
Public investment loans are offered at low interest rates and in some cases even zero interest loans are
provided. These loans are aimed at attracting players to the renewable energy industry. These policy
measures have been adopted by different countries on different scales; this means that the policy
framework for each country is unique.

Page 12
2.3
GlobalData Report Guidance
The report starts with an executive summary capturing the current and future outlook of renewable
policy frameworks and renewable energy production in the Asia Pacific region.
Chapter two provides an overview on the renewable energy policy framework. It also provides an
overview on FITs and various other types of financial incentives for renewable sources.
Chapter three discusses the major renewable policy frameworks in Australia for solar, wind,
geothermal and bioenergy sources. It also details the major financial incentives by state that drive
renewable energy production.
Chapter four discusses the major renewable policy frameworks in China for solar, wind, geothermal,
hydro and bioenergy sources.
Chapter five discusses the major renewable policy frameworks in India for solar, wind, geothermal,
Chapter six details the major renewable policy frameworks in Japan for solar, wind, hydro and
bioenergy sources.
Chapter seven details the major renewable policy frameworks in South Korea for solar, wind, hydro
and bioenergy sources.
Chapter eight discusses the major renewable policy frameworks in Thailand for solar, wind,
geothermal, hydro and bioenergy sources.
Chapter nine discusses the major renewable policy frameworks in Vietnam for solar, wind,
geothermal and bioenergy sources.
Chapter ten discusses the major renewable policy frameworks Taiwan for solar, wind, geothermal,

Page 13
Renewable Energy Regulatory Framework, Australia
3.1
Renewable Energy Regulatory Framework, Australia, Overview
Australia has vast unused renewable energy potential. To tap into this potential, renewable energy has
become an integral part of the Australian government's energy policy with the government making
conscious efforts to promote renewable energy sources.
In Australia, the Office of the Renewable Energy Regulator (ORER) is the major regulator for the industry
administering the Renewable Energy (Electricity) Act 2000, Renewable Energy (Electricity) Charge Act
2000, Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Act 2010 and the
Renewable Energy (Electricity) Regulations 2001.
The aim is to increase renewable electricity generation by generating an additional 45,000 Gigawatt hours
(GWh) per year by 2020. In order to achieve such an ambitious renewable energy target, the Australian
government has implemented a number of programs, including the promotion of renewable energy
through the Mandatory Renewable Energy Target (MRET) which aimed to enhance the contribution of
renewable energy sources in the total electricity produced. In 2010, MRET was superseded by the
Renewable Energy Target (RET). The RET scheme aims to achieve the 20% renewable energy target in
Australia's electricity supply and increase the renewable electricity generation to 41,000 GWh from
sources such as solar, wind and geothermal.
The Renewable Energy Target (RET) applies nationally, with large number of electricity retailers and
wholesale power buyers in all states and territories; these retailers and buyers are required to dispense a
proportionate amount of energy derived from renewable sources in order to meet Australia's renewable
energy targets.
The RET is implemented through the following legislations:
Renewable Energy (Electricity) Act 2000
Renewable Energy (Electricity) (Charge) Act 2000
Renewable Energy (Electricity) Regulations 2001
Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Act 2010
The increasing investments in the Research and Development (R&D) of the renewable energy market has
led to technical improvements with reductions in generation costs which has facilitated a boom in the
sector. The cumulative installed capacity of renewable power in the country has surged from 801
Megawatt (MW) in 2001 to 4,659 MW in 2011.

Page 14
The figure below summarizes the impact of various policies implemented in the country during the period
2000-2012. The implementation of the MRET initiated the development of renewable power in Australia.
Figure 1:
Renewable Power Market, Australia, Impact Analysis of Renewable Energy Policies,

2000-2012
Small-scale Renewable Energy Scheme
Financial incentive of up to $0.41/STC
(AUD40/STC) for small-scale renewable energy
installations.
Large-scale Renewable Energy Target
Inculcates legislated annual targets from 2011 to
2030.
Mandatory
Renewable Energy
Target
Initiated the growth of
the renewable energy
sector in Australia and
was superseded by
Renewable Energy
Target Scheme in 2010.
2000
Incentive range from $0.21 (AUD

0.20) to $0.62 (AUD0.60)
(depending on location and size of
installation) for solar power
installations.
2002
2001
Years
Feed-in Tariffs for Solar PV
2004
2003
Renewable Energy (Electricity)

Act
Unfolded a regulatory structure
supporting renewable sources
by Introducing RET.
2006
2005
2009
2007
2008
2012
2010
2011
Fuel Tax Reform

Excise rate for ethanol is
$0.12 (AUD0.12) per liter
Excise rate for biodiesel is
$0.19 (AUD0.19) per liter.
Renewable Energy
Target Scheme
Formulated to deliver 20%
of electricity from
renewable sources by
2020.
RPP for 2011 is 5.62%.
The size of the circle denotes

the impact of the policy.
Note: Renewable Purchase Percentage (RPP)

Small-scale Technology Certificates (STC)
Source: GlobalData
FIT and RPS programs along with other subsidies and support schemes have majorly impacted the solar
PV and wind industry in Australia. However, the impact of support programs on biopower and small hydro
is minimal. The figure below represents the relative impact of the various policies in Australia for
renewable energy technologies including wind, solar PV, small hydro and biopower.

Page 15
Figure 2:
Renewable Power Market, Australia, Impact on Applicable Renewable Power

Sources
Policy Impact on Applicable Renewable Power Sources
Policy/Incentive/Scheme
Wind
Solar PV
Small Hydro
Biopower
Feed-in Tariff (FIT) Program
Renewable Portfolio Standards (RPS)
Tradable Renewable Energy Certificates

System
R&D Funding
High
Medium
Low
Source: GlobalData
3.2
Renewable Energy Policy Framework, Australia, Federal Policies and

Incentives
The Ministerial Council on Energy released a document entitled Reform of Energy Markets' on December
11, 2003. The purpose of the document was to initiate the creation of national electricity and natural gas
market rather than a state-based provision for both. As a result, two federal level institutions, the
Australian Energy Market Commission (AEMC) and the Australian Energy Regulator (AER), were created.
The National Electricity Market (NEM) constitutes Australian Capital Territory, New South Wales,
Queensland, South Australia, Victoria and Tasmania. Western Australia and the Northern Territory are not
included in the NEM due to their geographic distance from the rest of the market.
AEMC was established under the Australian Energy Market Commission Establishment Act 2004 and is
responsible for rule and policy making for the NEM in Australia. The AER is accountable for the regulation
of electricity transmission networks in the NEM. It is also accountable for implementation of the National
Electricity Law and National Electricity Rules.
The following are some of the major policies promoting renewable power generation in Australia.
3.2.1
Renewable Energy Target Scheme
In August 2009, the Government of Australia introduced the RET Scheme which is formulated to deliver
on the governments assurance that 20% of electricity will be derived from renewable sources by 2020.
The RET scheme had a legislated target of an additional 45,000 GWh in 2020.
The RET scheme supersedes the previous MRET which was introduced in 2001. The MRET scheme
obligated large wholesale buyers of electricity to support renewable energy electricity generation. The
liable parties were directly accountable for enhancing the amount of electricity produced from renewable
energy sources and were required to submit RECs in proportion to their acquisitions of electricity.
RECs are an electronic form of currency created on the REC registry by eligible parties. A REC is
generally equivalent to 1 MWh of renewable electricity generated above the power station baseline
1 MWh of renewable electricity deemed to be generated by small generation units
1 MWh of electricity deemed to be displaced by the installation of solar water heaters

Page 16
The RECs are authenticated by ORER and registered RECs can be offered between eligible parties
(renewable energy power stations, small generation units) and liable parties (typically wholesale buyers of
electricity) at a price mutually agreed by both parties or at the market clearing price.
Outline of Annual Targets
The target set up under the RET scheme will increase to 45,000 GWh in 2020 and will then remain the
same until 2030.
Figure 3:
Renewable Energy Target, Australia, Annual Renewable Power Target, GWh, 20102030
45,000
40,000
35,000
30,000
GWh
25,000
20,000
15,000
10,000
5,000
0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
20202030
Source: GlobalData, Department of Climate Change and Energy Efficiency
Table 1:
Renewable Energy Target, Australia, Annual Renewable Power Target, GWh, 20102030
Year
Annual Target (GWh)
2010
12,500
2011
14,400
2012
16,300
2013
18,200
2014
20,100
2015
22,000
2016
26,600
2017
31,200
2018
35,800
2019
40,400
2020-2030
45,000
Source: GlobalData, Department of Climate Change and Energy Efficiency

Page 17
In June 2010, the government passed a law to divide RET into two parts: the Large-scale Renewable
Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). These schemes came
into effect on January 1, 2011, and created a financial incentive for investments in renewable energy
sources through the creation and trade of certificates. It is expected that both the LRET and SRES will
help Australia surpass its target of generating 45,000 GWh renewable power by 2020.
3.2.2
Small-Scale Renewable Energy Scheme
The small-scale renewable energy scheme creates financial incentives for owners to install eligible small
scale installations such as solar water heaters, solar panel systems, heat pumps, small-scale hydro
systems or small-scale wind systems. In order to promote small scale installations, the government has
created demand for Small-scale Technology Certificates (STC). These certificates are created for smallscale installations based on the amount of electricity they generate.
The number of certificates a system generates depends on the amount of electricity generated by the
small-scale solar panel, hydro or wind system, for a period of up to 15 years or by solar water heater or
heat pumps over a period of up to 10 years.
The SRES obligates the liable entities to purchase a certain amount of STCs every year. The number of
certificates to be purchased is determined based on the Small-scale Technology Percentage (STP), which
is set annually by the regulators. STP is calculated on the estimated:
Value, in MWh, for STCs that will be created
Amount of electricity that will be acquired by liable entities for the year
Amount of all partial exemptions expected to be claimed for the year
The fluctuation in price of STCs depends on the demand and supply in the market. The transactions can
occur at or below a price of $41.2/STC (AUD40/STC). The government guarantees a price of $41.2/STC
(AUD40/STC) if the seller uses the STC clearing house. However, the certificates may take some time to
clear, which will delay the payment to the seller.
The below figure represents the process flow diagram for creation and redemption of STCs:
Figure 4:
Small-scale Renewable Energy Scheme, Process Diagram, Australia, 2011

Regulator
(ORER)
Supply
STC registration
and validation
Demand
Setting of STP
Any GST Registered Entity
(Annual rate of liability)

Purchase
Eligible Parties
Eligible water
heaters
Eligible small-scale
solar panels, wind
and hydro systems
Sale
REC Registry
(STC Clearing House)
Creation
Purchase
REC Registry
(STC Market)
Sale
Surrender
Liable Entities
Wholesale
electricity retailers
Some generators
Quarterly
Surrender
Purchase
Any Registered Owner of STCs
Supply PEC
Emissions-Intensive
Trade-Exposed Entities
Note: Good and Services Tax (GST)

Source: GlobalData, ORER

Page 18
The table below summarizes the approximate maximum level of support that can be provided under the
SRES for a 1.5 kilowatt (kW) solar panel system installed before June 30, 2012. The support provided is
based on a $41.2/STC (AUD40/STC) for sellers using the STC clearing house, with different solar credits
support depending on the date of installation.
Table 2:
Small-scale Renewable Energy Scheme, Australia, Maximum Level of Support by

City, 2011
5x Solar Credits
Multiplier (systems
installed up to 30
June 2011)
4x Solar Credits Multiplier under

transitional arrangements for pre 5 May
2011 contracts (systems installed from 1
July 2011 to 30 June 2012)
3x Solar Credits
Multiplier (systems
installed from 1 July
2011 to 30 June 2012)
Adelaide
$6,200 (155 STCs)
$4,960 (124 STCs)
$3,720 (93 STCs)
Brisbane
$6,200 (155 STCs)
$4,960 (124 STCs)
$3,720 (93 STCs)
Canberra
$6,200 (155 STCs)
$4,960 (124 STCs)
$3,720 (93 STCs)
Darwin
$6,880 (172 STCs)
$5,520 (138 STCs)
$4,120 (103 STCs)
Hobart
$5,320 (133 STCs)
$4,240 (106 STCs)
$3,160 (79 STCs)
Melbourne
$5,320 (133 STCs)
$4,240 (106 STCs)
$3,160 (79 STCs)
Perth
$6,200 (155 STCs)
$4,960 (124 STCs)
$3,720 (93 STCs)
Sydney
$6,200 (155 STCs)
$4,960 (124 STCs)
$3,720 (93 STCs)
City
Source: GlobalData, Australia Department of Climate Change and Energy Efficiency
3.2.2.1
Solar Credits
Additional support in the form of solar credits is provided to small renewable power units. The type of units
eligible include solar PV rooftop installations, and small wind and small hydro systems. Solar credits apply
to the first 1.5 kW of capacity installed for systems connected with the grid and up to the first 20 kW of
capacity for off-grid systems.
Solar credits multiply the number of STCs. The multiplier to determine the amount of solar credits to be
received is based on the date of the solar PV system was installed, as shown in the table below:
Table 3:
Small-scale Renewable Energy Scheme, Australia, Solar Credits, 2009-2013
Date Installed
Multiplier
9 June 2009 30 June 2011
1 July 2011 30 June 2012
1 July 2012- - 30 June 2013
From 1 July 2013 onwards
Source: GlobalData, Australia Department of Climate Change and Energy Efficiency

Page 19
3.2.3
Large-scale Renewable Energy Target
The LRET schemes are aimed at large-scale renewable energy projects such as wind farms and
commercial solar and geothermal projects; these are expected to achieve the 2020 target of 41,000 GWh.
The LRET has legislated annual targets and will operate the same as the current RET, but as a separate
scheme to the SRES. From 2011 to 2030, the yearly targets for the LRET are 4,000 gigawatt-hours
(GWh) less than the previous RET targets, reaching 41,000 GWh by 2020.
The figure below represents the process for creation and redemption of large-scale renewable energy
certificates.
Figure 5:
Large-scale Renewable Energy Target, Process Diagram, Australia, 2011

Regulator
(ORER)
Supply
Demand
Accreditation and
LGC validation
Eligible Parties
Accredited
renewable power
stations
Creation/sale
Setting of RPP
(Annual rate of liability)
Purchase
LGC Market
(REC Registry)
Surrender
Surrender
Purchase
Any Registered Owner of LGCs
Liable Entities
Wholesale
electricity retailers
Some generators
Supply PEC
Emissions-Intensive
Trade-Exposed Entities
Note: Renewable Purchase Percentage (RPP), Large-scale Generation Certificates (LGCs), Partial Exemption Certificates (PEC)
Source: GlobalData, ORER

Page 20
The new LRET annual targets are summarized in the figure and table below.
Figure 6:
New Large-scale Renewable Energy Target (LRET), Annual Targets, Australia,

(GWh), 2011-2030
45,000
40,000
35,000
30,000
GWh
25,000
20,000
15,000
10,000
5,000
0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020 2030
Source: Global Data, ORER, Australia Department of Climate Change and Energy Efficiency
Table 4:
New Large-scale Renewable Energy Target (LRET), Annual Targets, Australia,

(GWh), 2011-2030
Year
Revised targets (GWh)
2011
10,400
2012
16,388
2013
18,283
2014
16,100
2015
18,000
2016
20,581
2017
25,181
2018
29,781
2019
34,381
2020 2030
41,000
Source: : Global Data, ORER, Australia Department of Climate Change and Energy Efficiency
Existing banked RECs will be available for use in the LRET but not for the new SRES. Due to the
introduction of a large number of RECs in the last six months of 2010, the targets surge temporarily in
2012 and 2013. However, these surges are offset by the 2014 and 2015 targets in which the amount of
RECs will remain the same as the two previous years.

Page 21
3.2.4
Renewable Energy and Energy Efficiency Partnership
The Renewable Energy and Energy Efficiency Partnership (REEEP) was introduced at the Johannesburg
World Summit on viable development in August 2002. REEEP is a public-private partnership designed to
develop clean energy markets and offer funding facilities to energy efficiency projects. The Australian
government is granting funds for the Southeast Asia and Pacific Regional Secretariat to address issues
related to policy, regulatory and financial. Funding of $1.34m (AUD1.3m) has been granted in support of
the activities taken up the Regional Secretariat.
3.2.5
Renewable Energy Demonstration Program (REDP)
The Renewable Energy Demonstration Program (REDP) offers large grants to support green power
production
demonstration
projects
using
different
technologies.
The grants provided under the scheme are used to support the growth of large scale grid connected
renewable energy projects. The REDP has supported the commercialization of renewable energy and has
also helped in accelerating the deployment of new renewable energy technologies for power generation in
the country. The program is headed by the Department of Resources Energy and Tourism with a total
fund of $242.05m (AUD235m). In May 2009 solar projects were excluded from the program.
The three projects funded under the program, two geothermal projects ($92.7m (AUD90m) and $63.86
(AUD62m)) and one integrated energy project $15.45m (AUD15m), were successful due to financial
support offered under REDP. One third of the total expenditure of the program was incurred on each of
the three projects.
3.2.6
Clean Energy Initiative
The Clean Energy Initiative (CEI) was announced in the May 2009 budget and was allocated $5.15 billion
(AUD5 billion). The initiative supports the Carbon Pollution Reduction Scheme and the Renewable Energy
Target by conducting R&D into low-emission energy technologies, including industrial scale carbon
capture and solar energy. The CEI has three components:
Carbon Capture and Storage (CCS) Flagships Program: funding to aid the construction and
demonstration of large-scale CCS projects in Australia, which may include gasification, combustion
capture and storage techniques. The aim is to establish 1,000 MW of low emission fossil fuel
production.
Solar Flagships Program: funding to support construction and demonstration of four large-scale solar
power systems in Australia, which may be inclusive of solar PV and energy storage techniques.
Renewables Australia: funding to create Renewables Australia (RA), a new body which will support
the development, commercialization and deployment of renewable techniques by commercial
investment approach.
The growth and demonstration of solar power stations will enhance the commercialization of these critical
technologies.
Under this program, the government will invest:
$2.47 billion (AUD2.4 billion) in low emission coal technologies, including new funding of AUD2 billion
in industrial-scale CCS projects under the CCS Flagships program;
AUD1.6 billion in solar technologies, in addition to new funds of $1.41 billion (AUD1.365 billion) in a
Solar Flagships program, helping the country position itself as a world leader in the renewable
technology for the future
$478.9m (AUD465m) to promote renewables in Australia to aid technology R&D inclusive of new
funding of $103m (AUD100m).

Page 22
3.2.7
Green Loans Program for Households
The green loans program for households was announced as part of the countrys climate change budget.
This program included low-interest loans of up to $10,300 (AUD10,000), a green reward to the value of
$51.5 (AUD50) and detailed household sustainability assessments. The loan component was removed in
22 March 2010. The $51.5 (AUD50) Green Reward was provided to households who underwent
assessments up until May 11, 2010.
3.2.8
Renewable Power Percentage
The Renewable Power Percentage (RPP) is a mechanism used by the eligible parties to calculate how
many RECS they are required to surrender in order to remit their liability each year.
For example, the RPP was 5.98% in 2010, therefore, parties purchasing 100,000 MWh of power must
surrender 5,980 RECs in order to completely discharge their liability for the year.
The RPP is estimated to achieve the interim targets specified in the legislation which will achieve the
renewable energy target for 2020.
The RPP is calculated in advance, and is based on:
The amount of renewable electricity for the year
The estimated amount of electricity that will be acquired for the year
The amount by which the required GWh of renewable source electricity for previous years has
exceeded, or has been exceeded by, the amount of renewable electricity required under the scheme
for those years
All partial exemptions expected to be claimed for the year
The RPP for 2011 has been set as 5.62%. This is equivalent to 10.6m Large-scale Generation
Certificates (LGCs) as a proportion of total estimated electricity consumption for 2011.
3.2.9
Renewable Energy Future Fund
On May 11, 2010, the Australian government committed a further $672.07m (AUD652.5m) over four years
to create a Renewable Energy Future Fund in order to assist in the countrys response to climate change.
The fund provides additional support in terms of:
Growth and deployment of large and small scale renewable energy projects, for example, increasing
investments in geothermal and solar energy
Improvement of industrial and commercial energy efficiency, allowing Australian businesses to

decrease their energy consumption
This fund is part of the clean energy initiative program introduced by the government which includes the
$2.06 billion (AUD2 billion) CCS flagship program and the $1.55 billion (AUD1.5 billion) Solar Flagship
Program. The government is planning to invest $113.82m (AUD110.5m) in certain projects.

Page 23
The following table shows the funds offered under the renewable energy future fund for supporting
advanced solar energy technologies:
Table 5:
Renewable Energy Future Fund, Australia, Funding for Advanced Solar Energy
Technologies, 2010
University
Purpose
Amount (m)
University of New South

Wales
To overcome the performance limitations of commercial solar

cells.
BT Imaging Pty,. Ltd.
To improve the performance of PV manufacturing.
$2.32m
(AUD2.25m)
Australian National University
To lead applied research project in collaboration with industry

to help develop the next generation of solar cells.
$5.09m
(AUD4.95 m)
Sapphicon Semiconductor
Pty,. Ltd.
To develop a high-efficiency, integrated solar module on a

transparent substrate.
$2.32m
(AUD2.25m)
CSIRO and the Australian

National University
To develop advanced solar thermal energy storage

technologies.
$5.15m
(AUD5m)
$4.12m
(AUD4m)
Source: Global Data, Minister for Climate Change and Energy
The following table shows the funds offered under the renewable energy demonstration program for
supporting solar energy projects:
Table 6:
Amount
Renewable Energy Demonstration Program, Australia, Funding for Solar Projects,

2010
Purpose
$32 m
CS Energy for the construction of a 23 MW solar boost to coal-fired turbines at Kogan Creek, near
Chinchilla in western Queensland.
$60 m
N.P. Power Pty,. Ltd. (Whyalla Solar Oasis consortium) for the construction of a 40 MW concentrated
solar thermal demonstration plant at Whyalla, South Australia.
Source: Global Data, Minister for Climate Change and Energy
The government is establishing two new schemes to promote advanced renewable energy technologies.
These programs, the Emerging Renewables Program and the Renewable Energy Venture Capital Fund,
are financed at $107.3m (AUD104.2m) and $111.9m (AUD108.7m) over a period of five years and 14
years, respectively. The programs are funded by existing resources within the Department of Resources,
Energy and Tourism (DRET) and from the funding announced in the 2010-2011 budget for the Renewable
Energy Future Fund.
It is expected that geothermal energy and related technologies will be major beneficiaries of these
initiatives. The government is planning to changed the definition of exploration in its legislation this will
allow the geothermal industry to enjoy a tax deduction for exploration activities. From July 1, 2012,
geothermal exploration activities will receive the same income tax treatment as exploration activities for
traditional hydrocarbon energy sources. This measure was a recommendation of the Policy Transition
Group and will cost the Government $10.3m (AUD10m) over two years (from 2013 to 2015).

Page 24
3.2.10 Renewable Energy Equity Fund

The renewable energy equity fund provides venture capital for small, innovative renewable energy
companies. The companies included are those which directly commercialize or enable renewable energy
technologies and services, such as manufacturers of PV cells or the companies that convert this energy
to useful electricity. In line with this fund, the companies are eligible to receive venture capital provided
that there is an innovative development being commercialized.
The fund manager acquires part-ownership of the company in return for the provision of capital. The
Commonwealth bank contributed $18.2m (AUD17.7m) for establishment of the fund, CVC Reef Ltd.,
which is matched by private sector funding of $9.1m (AUD8.8m) for a total fund of $27.4m (AUD26.6m).
The renewable energy equity fund is now fully invested and hence has been closed for new applications.
3.2.11 Connecting Renewables Initiative

On July 10, 2011, the government announced a Clean Energy Package which includes the establishment
of the Australian Renewable Energy Agency (ARENA). ARENA is a new agency that will support the
development of emerging renewable technologies.
Unallocated funding which was previously allocated to the Connecting Renewables Initiative will be
consolidated into ARENA. Collectively, around $1.75 billion (AUD1.7 billion) in uncommitted funding from
a range of consolidated programs will be available for the ARENA board for investments made in new
renewable energy projects by 2020; these include: large scale solar, geothermal, and ocean projects, and
projects that potentially involve renewable energy-related transmission infrastructure investments.
3.2.12 Renewable Energy Venture Capital Fund

This fund is a
13 year co-investment arranged by the Australian government, Southern Cross Venture
Partners (SXVP) and Softbank China Venture Capital (SBCVC). This fund is a key element of the
governments renewable energy strategy and will form part of ARENA.
The fund will provide venture capital and active investment management to encourage the development
of Australian companies that are commercializing renewable energy technologies. These investments will
help companies to overcome capital constraints, develop technologies, increase skills and forge
international links. The fund will be based in Sydney, Australia and will also have offices in Shanghai and
Silicon Valley. Applications for the management of the fund closed on 22 June 2011.
It is anticipated that the fund will become operational in early 2012. SXVP will make all investment
decisions using its own investment criteria and the eligibility criteria in the Program Administrative
Guidelines.
3.2.13 Climate Change Grant Program

The climate change grant program primarily focuses on helping the Australian public understand the need
to respond to climate change; it also aims to highlight the benefits and opportunities of a clean energy
environment. The government has allocated $3.09m (AUD3m) towards the climate change grant program.
The program was introduced on June 30, 2011 and provides organizations with the opportunity to apply
for grants of up to $257,500 (AUD250,000) to highlight activities that demonstrate the opportunities for
Australia to move towards a clean energy future.
3.2.14 Community Energy Grants Program

The community energy grants program provides funding to eligible community groups for the installation
of renewable energy technologies, such as solar PV systems, solar hot water and wind generators, in
order to reduce the energy consumption of the buildings they occupy.
The combined capacity of systems installed through the community energy grants is 243kW. In addition,
the total volume of solar hot water heaters installed through the grant program is 1,520 liters.

Page 25
3.3
Financial Incentives and Policy Support for Solar Power, Australia, Federal
Incentives
The solar PV market in Australia has been growing due to the availability of abundant solar resources and
policy support and the government as set ambitious goals for its growth. The central government, in
association with local governments, has planned numerous programs for rapid development of the
domestic PV market.
The extended MRET and FIT are the key drivers for the uptake of the solar installations market in
Australia. MRET mandates 41,000 GWh of energy from renewable energy sources in the country by
2020. The government has taken up plans to install large numbers of PV power systems to meet this
target.
The government plans to upgrade electricity infrastructure and construct new infrastructure in order to
meet future Transmission and Distribution (T&D) demand. Solar parks need to be linked to the national or
regional link points of utility companies in order to avoid transmission losses in long transmission lines.
The government of Australia is making efforts to tackle infrastructure bottlenecks for renewable power,
including solar PV.
The cumulative installed capacity of solar PV increased from 33.6 MW in 2001 to 970.9 MW in 2011 at a
Compound Annual Growth Rate (CAGR) of 39.9%. The annual capacity witnessed an increase in 2010
due to the addition of around 383.3 MW of capacity. This increase in annual capacity in 2010 was
primarily due to the introduction of state level FITs in 2008 and the establishment of the solar credits
scheme during 2009. The figure below represents the annual capacity addition of solar PV power in the
country during the period 2001-2011.
Figure 7:
Solar PV Power Market, Australia, Annual Capacity Additions, MW, 2001-2011
450
Financial incentives of up to $0.41

(AUD0.40) for small scale PV
installations drives residential PV
installations
400
350
300
MW
250
200
Solar credits scheme

accelerated the growth of
solar PV installations.
150
100
50
Introduction of state level

FIT programs spurred
market growth.
MRET initiated PV market

development.
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: GlobalData, Alternate Energy e-Track

Page 26
3.3.1
The Solar Cities Program
The Solar Cities program is a $77.25m (AUD75m) program established to promote distributed solar
technologies (including solar PV and solar thermal technologies), smart meters and new approaches to
electricity pricing. The main aim of the program is to provide a sustainable energy future to urban
locations across Australia.
The main objectives of this program are:
To define the environmental and economic effects of collaborating cost effective pricing with the use
of different solar techniques and energy efficiency measures.
To detect any existing hindrances to energy efficiency, electricity demand management and the use
of solar techniques, among industries in different cities of Australia.
To examine the steps undertaken to deal with these hindrances.
Australia has solar city programs in Adelaide, Alice Springs, Blacktown, Central Victoria, Moreland, Perth
and Townsville. Each solar city program will consolidate a unification of alternative energy; for example,
energy sufficiency measures for industry, the use of solar techniques, and economical price trials to
people who use energy efficiently, and community education about proper energy consumption.
3.3.2
Green Vouchers for Schools/National Solar Schools Program
The Green Vouchers for Schools program was introduced by the federal government on July 17, 2007.
The main aim of the program was to provide a practical opportunity for schools to improve their energy
and water efficiency and to increase awareness of energy and water efficiency solutions in schools and
the wider community.
On July 1, 2008 the program was superseded by the National Solar Schools Programs. Schools can
benefit from grants under the National Solar Schools Program from July 2008 to June 2015. The program
is supporting Australian schools to handle the climate change by providing grants of up to $51,500
(AUD50,000) for single campus schools and up to $103,000 (AUD100,000) for eligible multi-campus
schools for the establishment of solar power systems, and renewable energy and energy efficiency
measures.
Schools installing solar power systems of a minimum of 2kW are eligible for a grant of up to $51,500
(AUD50,000) (Goods and Service Tax (GST) exclusive) for the installation of eligible items. If a solar
power system of less than 2kW is installed, a grant of up to $30,900 (AUD30,000) (GST exclusive) is
offered to be spent on eligible items.
Under the program, schools applying for financial support from July 1, 2010 are eligible to avail funds for
solar power systems and additional grants of up to $15,450 (AUD15,000) for the installation of eligible
technologies.
The non-government schools receiving Australian Government Grants for Recurrent Expenditure under
the Schools Assistance Act 2008, government schools which are officially recognized by their state or
territory government education authority as a school providing primary and/or secondary education, are
eligible for a grant under the National Solar Schools Program. Whereas, the educational institutes like
kindergartdens, early childhood centers, preschools, colleges and universities are not eligible to receive
grants under this program.
The grant available to a multi-campus school may be up to either $103,000 (AUD100,000) or $15,450
(AUD15,000) depending on whether it is eligible to avail funding for solar power systems under any other
Australian government program.
The National Solar Schools Program received applications from more than 1,900 schools across Australia
for the 2011-2012 funding. The program received so many application that the government exhausted its
allocated resources and the funding round for 2011-2012 is now closed for new applications.

Page 27
3.3.3
The Solar Homes and Communities Plan
The Solar Homes and Communities Plan introduced the Photovoltaic Rebate Program in 2000 for the
provision of a $4,120 (AUD4,000) rebate for households that install solar PV systems. In November 2007,
the program was modified to allow rebates of up to $8,240 (AUD8,000) for setting up solar PV systems.
Details of the requirements for these rebates and provided in the table below.
Table 7:
Solar Homes and Communities Plan, Australia, Summary Of Rebates And Grants
Minimum
system size
Australian
Government support
Eligibility
Residential (Rebates)
New systems
Up to $8,240
(AUD8,000)
450 watts
$8.24/W (AUD8/W) up
to 1kW
The system must be installed at principal place of residence.

The applicant must not previously be receiving a rebate for a PV
system from the Australian government.
Extensions to old systems

Up to $5,150
(AUD5,000)
450 watts
$5.15/W (AUD5/W )
up to 1kW
If the applicant has not received a rebate on the system, a rebate is

available to extend the current system by 1kW .
If the applicant has received a rebate for systems less than 1kW, an
extension rebate to bring the system up to a 1kW capacity is available.
Source: Global Data/ Australia Department of Climate Change and Energy Efficiency
The programs resulted in:
Over $1.3 billion (AUD1 billion) in support for the installation of over 130,000 systems
A significant increase in accredited solar panel installers to more than 3,200, with approximately 80
new installers per month in the last year of the program
The program was replaced with the solar credits program in 2009.
3.3.4
Australian Solar Institute
The Australian Solar Institute (ASI) is part of the Australian Government's Clean Energy Initiative. The
government is offering $154.5m (AUD150m) to the ASI, which is financing solar R&D and strengthening
relationships between researchers in universities, research institutions and industry, and building
connections with peak overseas research institutions.
Since its establishment, the ASI has announced funding for more than 24 projects with a total value of
approximately $206m (AUD200m) in addition to the initial commonwealth bank investment of $65.92m
(AUD64m). The projects funded include foundation projects and projects selected through two rounds of
competitive bidding.
The government has also declared that the ASI will have up to $51.5m (AUD50m) to assist joint solar
research projects. Financing will help increase the link between Australian and US researchers.

Page 28
3.4
Financial Incentives and Policy Support for Wind, Australia, Federal

Incentives
The wind power installed capacity grew from 71 MW in 2001 to 2,557 MW in 2011, at a CAGR of 43.1%
per annum. By 2020, the cumulative wind power installed capacity is projected to reach 8,394 MW, at a
CAGR of 14.5%. The observed growth in installations is due to the increased emphasis on a varied set of
policies. In the future the key catalyst will be the combination of government policies and subsidies.
Wind power in Australia is supported through various policies introduced by the government. In addition,
the Australian government has also announced wind specific schemes/programs to promote wind power
generation in the country. Some of the support programs which have impacted wind industry in Australia
are MRET targets, wind energy forecasting capability, national code for wind farm construction and
mechanisms supporting grid connected wind power.
The cumulative installed capacity of wind power in the country has increased from 71 MW in 2001 to
2,557 MW in 2011 at a CAGR of 43.1%. The annual capacity increased in 2008 due to addition of around
677 MW of capacity. The difficulties faced were the implementation of RET coupled with the global
financial crisis, policy uncertainty and low prices for RECs; these factors made it difficult for developers to
secure financing for their projects. As a result, the wind power industry witnessed a reduced growth of the
sector during 2008-2010. The figure below represents the annual capacity addition of wind power in the
country from 2001 to 2011.
Figure 8:
Wind Power Market, Australia, Cumulative Capacity, MW, 2001-2011

3,000
LRET and SRES provided greater

certainty to large-scale as well as
small-scale wind developers.
2,500
MW
2,000
1,500
1,000
MRET initiated wind market
development.
500
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
3.4.1
Wind Energy Forecasting Capability
In 2004, the government announced $14.42m (AUD14m) over the period of five years to assist the
development and installation of software and systems to allow accurate wind forecasting and promote
wind energy in the national electricity market. The scheme was discontinued in 2009.

Page 29
3.4.2
National Code for Wind Farm Construction
The contribution of wind energy is increasing in Australian energy markets. The Australian government
introduced the national code for wind farm growth and construction. The National Code for Wind Farms
construction was introduced by the government in May 2006 in order to substitute state and territory
codes
of
variable
standards.
In June 2008, the government planned to examine the obstacles facing the uptake of wind energy and
attempt to overcome them with a federal code involving government, industry and communities.
3.4.3
Mechanisms Supporting Grid-Connected Wind Power
The first mechanism to enhance grid-connected renewable energy in Australia was the Green Power
voluntary schemes provided by electricity retailers. Under these schemes, customers pay a premium on
their power bill for an equal amount of renewable power generated (over and above the requirement
under the RET).
In Australia, these schemes were first offered by retailers throughout the state of New South Wales due to
the development of green power accreditation guidelines by New South Wales Sustainable Energy
Development Authority (SEDA).
3.5
Financial Incentives and Policy Support for Geothermal, Australia, Federal

Incentives
Government policy support for the promotion and development of geothermal energy in the country drives
the growth of the renewable energy market. The government has introduced financial incentives to offset
the high investment needed for geothermal power generation. Policy initiatives such as the development
of the geothermal industry and the geothermal drilling program have played a major role in the growth and
development of the energy market. Due to financial support backed by the government, the cumulative
geothermal power installed capacity is projected to reach 231 MW, at a CAGR of 70.7%, in 2020.
3.5.1
Geothermal Industry Development Framework
The Geothermal Industry Development Framework was introduced on December 1, 2008 with the aim of
promoting
the
growth
of
geothermal
energy
in
Australia.
The framework is an extensive approach to business growth and includes a geothermal energy technical
roadmap which was commenced for the Council of Australian Governments (COAG).
The vision introduced for geothermal energy is "to make a high contribution to Australia's long term
energy supply and cut national GHG emissions by establishing a secure and environmentally accountable
geothermal energy industry".
3.5.2
Geothermal Drilling Program
The Geothermal Drilling Program was introduced on August 20, 2008 and offers support to companies
aiming to develop geothermal energy sources with the cost of concept projects.
The Geothermal Drilling Program is part of the $51.5m (AUD50m) Renewable Energy Fund (REF). The
program provides dollar-for-dollar reimbursement matching grants up to a limit of $7.21m (AUD7m) for
qualifying geothermal proof-of-concept projects.
The aim of the program is to:
Focus on the growth of the geothermal industry
Enhance growth and productive innovation by Australian geothermal companies by increasing the
number of companies
Increase investor and private sector confidence in the geothermal industry
Develop Australia as the global leader in geothermal systems

Page 30
3.6
Financial Incentives and Policy Support for Bioenergy, Australia, Federal

Incentives
Australia is a thermal based country that needs to decrease its emission levels considerably; it also has
good biomass potential in wood resources. Consequently, biomass and biogas contribute significantly to
the renewable generating capacity. Biogas plants are mostly based on fuel input from land-fill gas and
sewage gas. Most of the biogas plants are located in Victoria and New South Wales (NSW).
The strong government backing is expected to promote growth in the bioenergy sector. The bioenergy
power generation capacity witnessed healthy growth in the period 2001-2010. The bioenergy installed
capacity in the country in 2001 was 606 MW which increased to 893 MW by the end of 2010. The growth
of installed capacity in the country is expected to grow at almost the same rate in the forecast period of
2010-2020. The capacity is projected to reach about 2,139MW by the end of 2020.
Table 8:
Renewable Power Policy Framework, Asia Pacific, Major Policy Instruments

Supporting the Industry, 2010
Government
Initiative
Description
Timeline
An excise tax of $0.39 (AUD0.38) per liter currently applies to petrol,

ultra low sulfur diesel and biofuels; however, the effective excise rate for
domestically produced ethanol and imported and domestically produced
biodiesel was zero until 1 July 2011 due to the Cleaner Fuels Grant
Scheme (extended from an original timeline of July 2008).
2003 to June 30,

2011
A 50% discount on energy content fuel tax rates will apply to the excise
rate of biofuels (and other alternative fuels) from July 2011. Final excise
rates from July 2015 will be $0.19 (AUD0.19) per liter for biodiesel and
$0.12 (AUD0.12) per liter for ethanol.
July 1, 2011 to
July 1, 2015
A grant is provided for biofuels producers that offset the current $0.39
(AUD0.38) per liter, providing a net effective excise rate of zero until July
2011.
2003 to June 30,

2011
The grant decreased on July 1, 2011 in five equal, annual increments

meaning that excise will effectively be applied in five equal, annual steps
until it reaches its final rates in July 2015 (Biodiesel must meet the Fuel
Quality Standard in order to receive the grant.)
July 1, 2011 to
July 1, 2015
Energy Grants
Credit Scheme
Provides a credit for businesses that use diesel (including biodiesel) of

38.143 cpl for off road users and 18.51 cpl for on road users, and 20.809
cpl for ethanol on road users. The grant is being phased-out and
replaced with fuel tax credits.
Being phased-out
from 1 July 2006
to 30 June 2010
Fuel tax credit

reforms
Alternative fuels used for off road business use will become eligible for a
fuel tax credit equal to the amount of the fuel tax.
1 July 2006 to 30
June 2010
Biofuels Action
Plan
Industry/government plan setting out annual volumetric goals and

business plans, including marketing and retail strategies, for ethanol and
biodiesel blended fuels to meet the government's target of achieving 350
million liters (ML) of biofuels production by 2010.
December 2005
Government Fleet
Use
The Australian government fleet is encouraged to use E10 where

possible.
Biofuels Capital
Grant Program
$37.6m capital fund to support new or expanded biofuels production

capacity. Projects must produce a minimum of 5 ML of biofuels.
Maximum of $10m per project. New facilities approved under the
program also receive a capital grant that effectively provides around 1
cpl additional assistance over the plant's lifetime.
NB. grants were provided to companies in Queensland, NSW, Victoria
and South Australia, but none are provided in Western Australia.
Excise Tax
Cleaner Fuel Grant

Scheme
Renewable Energy
Development
Initiative
Announced in
July 2003.
Closed for new
applications
$100m initiative supporting new renewable energy technology activities

(including biofuels) with strong early-stage commercialization and
emissions-reduction potential. Biofuels applicants compete with other
renewable energy technology projects for grants of between $50,000
and $5m to assist with the funding of a project. Applicants must at least
match the amount of the grant.
NB None of the successful first round projects were biofuels.

Page 31
Low Emission
Technology
Demonstration
Fund
$522.9m fund to support the commercial demonstration of technologies

with the potential to develop long-term, large-scale Greenhouse Gas
(GHG) emission reductions in the energy sector. Minimum grant of $20m
with applicants contributing at least twice the amount of the grant.
NB. Biofuels projects are finding it difficult to meet eligible commercial
capacity requirements.
Low Emission
Technology and
Abatement
Approximately $7-8m to support strategically important projects that will

contribute to a stronger renewable energy industry. Grants will generally
be up to a maximum of 50 per cent of eligible project costs and are
expected to range between $50,000 and $100,000.
Renewable Energy
Equity Fund
Up to $20m to encourage the development of companies and other

incorporated bodies that are commercializing R&D in renewable energy
technologies. Provides up to 2/3 of the agreed level of capital.
Ethanol
Confidence
Working Group
To assist in building consumer confidence.
May 2003
Source: Global Data, Department of Agriculture and Food
3.6.1
Ethanol Production Grants Program
The Ethanol Production Grants (EPG) Program was introduced on September 18, 2002. The main aim of
this program is to encourage the use of biofuels in Australia.
Four bills passed in respect of the future taxation of alternative transport fuels attained Royal Assent, on
June 29, 2011. This means that the current full excise reimbursement arrangement for domestic fuel
ethanol via the EPG Program will continue for another ten years from December 1, 2011, with a review to
be conducted after June 30, 2021.
Only the production houses producing ethanol entirely in Australia are eligible to receive grants under this
program. Additionally, ethanol must be produced entirely from locally derived biomass feedstock
(including biomass waste and residues) and it must be used in, or as, a transport fuel in Australia.
3.6.2
Biofuels Capital Grants Program
The Biofuels Capital Grants Program was aimed at increasing the availability of biofuels for the domestic
transport market. Under this program the grants were awarded on a competitive basis, at a rate of $0.16
(AUD0.16) per liter for new or expanded projects, producing a minimum of 5m liters of biofuel annually.
The amount of grants to be awarded was limited to a maximum of $10.3m (AUD10m) per project. This
program is closed to new applications.
3.6.3
Methane to Markets Partnership
Australia was part of the Methane to Market (M2M) Partnership Program, a global initiative introduced in
November 2004 at the Ministerial Meeting in Washington, D.C., that sought to integrate the recovery and
consumption of coal mine methane with China. The M2M Partnership is an autonomous, non-binding
framework for international cooperation to advance cost-effective, near-term methane recovery and use of
clean energy source. It led to growth and application of projects resulting in a decline in direct methane
emissions. In 2010, the scheme was superseded by the Global Methane Initiative.
3.6.4
Energy Grants Credit Scheme Alternative Fuels
The Energy Grants Credit Scheme for alternative fuels provides a fuel grant for businesses using
alternative fuels. The grant rate was set in 2006, and reduced over five years to reach zero in 2010. The
grant rate on July 1, 2009 was $0.38 (AUD0.37) per liter for biodiesel and $0.42 (AUD0.41) per liter for
ethanol. The scheme discontinued on July 1, 2010.
3.6.5
Fuel Tax Reforms
In the 2010-2011 budget, the Australian government announced that it would complete its plan for energy
content based taxation of alternative fuels. The government incorporated a 50% tax discount for
alternative fuels. In September 2010, the government announced further revisions to the phasing in
arrangements for ethanol.

Page 32
3.6.6
Second Generation Biofuels Research and Development Program
The Second Generation Biofuels R&D Program is basically aimed at supporting the research,
development and demonstration of new biofuel technologies and feedstocks that address the sustainable
development of a biofuels industry in Australia.
Funding of $12.99m (AUD12.617m) was allocated to six projects over three years from 2009 to 2012 as
part of the Australian governments expanded $5.25 billion (AUD5.1 billion) Clean Energy Initiative.
Applications for the program closed on 30 January 2009 and the program is scheduled to be completed
by June 2012.
3.6.6.1
Australia Biofuels Excise Rates
In Australia, effective excise rate is charged from 2011to 2012 and from 2015 to 2016 in five equal steps
so that by 2015-2016 the excise rate charged on ethanol will be $0.12 (AUD0.12) per liter and biodiesel
will be charged at the rate of $0.19 (AUD0.19) cents per liter.
The table below details biofuels excise rates in Australia.
Table 9:
Fuel
Type
Biofuels Excise Rates, Australia, 2010

Ethanol
Biodiesel
Excise Applied (per

liter)
Effective Relief (per

liter)
Excise Applied (per

liter)
Effective Relief (per

liter)
2005/06
$0.39 (AUD0.38)
$0.39 (AUD0.38)
2006/07
$0.39 (AUD0.38)
$0.39 (AUD0.38)
2007/08
$0.39 (AUD0.38)
$0.39 (AUD0.38)
2008/09
$0.39 (AUD0.38)
$0.39 (AUD0.38)
2009/10
$0.39 (AUD0.38)
$0.39 (AUD0.38)
2010/11
$0.39 (AUD0.38)
$0.39 (AUD0.38)
2011/12
$0.26 (AUD0.25)
$0.24 (AUD0.23)
$0.39 (AUD0.38)
$0.33 (AUD0.32)
2012/13
$0.52 (AUD0.5)
$0.22 (AUD0.21)
$0.79 (AUD0.76)
$0.29 (AUD0.28)
2013/14
$0.77 (AUD0.75)
$0.19 (AUD0.18)
$0.11 (AUD0.11)
$0.25 (AUD0.24)
2014/15
$0.10 (AUD0.10)
$0.15 (AUD0.15)
$0.15 (AUD0.15)
$0.21 (AUD0.20)
2015/16
$0.12 (AUD0.12)
$0.13 (AUD0.13)
$0.19 (AUD0.19)
$0.16 (AUD0.16)
Source: Global Data/ Australian Bureau of Resource Economics
Although there is no definite policy statement on biofuel production, the recent federal government budget
affirmed that biofuel producers will be charged the increased rate of excise as of July 2011. The table
below details the effective tax rates for biofuels in Australia.
Table 10:
Effective Tax Rates For Biofuels, Australia, 2010
Fuel Type
(per liter)
Energy
Content
Band
Biofuels
Biodiesel
1-Jul-10
1-Jul-11
1-Jul-12
1-Jul-13
1-Jul-14
July 1,2015
(final rate)
High
$0.39
(AUD0.38)
$0.78
(AUD0.76)
$0.11
(AUD0.11)
$0.15
(AUD0.15)
$0.19
(AUD0.19)
Domestic
Ethanol
Mid
$0.26
(AUD0.25)
$0.51
(AUD0.50)
$0.77
(AUD0.75)
$0.10
(AUD0.10)
$0.12
(AUD0.12)
Imported
Ethanol
Mid
$0.39
(AUD0.38)
$0.26
(AUD0.25)
$0.22
(AUD0.21)
$0.19
(AUD0.18)
$0.15
(AUD0.15)
$0.12
(AUD0.12)
The excise rates listed in this table are the effective excise rate. That is, these listed rates represent the net effect
following decreasing offsetting grants to reflect the effective rate each year over the transition period to the final rate.
Source: Global Data/ Treasury Table 2011 Rates May 14, 2010/ The United States Department of Agriculture

Page 33
3.6.6.2
Amendments to Australian Automotive Diesel and Biodiesel Fuel Quality Standards
The Australian government Department of the Environment, Water, Heritage and the Arts introduces and
reviews fuel quality standards under the Fuel Quality Standards Act (2000) to decrease the level of
emissions from fuel and to increase emissions control techniques. The act also assures that, where
appropriate, information is provided about the fuel supplied.
The department made an amendment to the Fuel Standard (Automotive Diesel) Determination (2001) to
permit up to 5% biodiesel fuel. The use of 5% blends is generally accepted by vehicle manufacturers and
no change is required of standard diesel engines. Blends with more than 5% biodiesel will be managed
through an approval process.
3.7
Financial Incentives and Policy Support for Energy Efficiency, Australia,

Federal Incentives
3.7.1
Energy Efficiency Information Grants
The Energy Efficiency Information Grants Program aims to assist the industry associations and non profit
organizations to provide practical, tailored energy efficiency information to small and medium enterprises
and community organizations.
The government will establish a $40m program, which will provide grants over four years to industry
associations and non-profit organizations that work with small and medium enterprises and community
organizations.
It is expected that the applications for the first round of grant funding will be announced during the first
quarter of 2012. Grants are expected to range from $0.103m (AUD0.1m) to $103m (AUD1m).
3.7.2
Energy Savings Initiative
The Energy Saving Initiative is a market based instrument for driving economy-wide improvements in
energy efficiency. This initiative will make it a requirement for energy retailers to demonstrate and apply
energy savings in businesses and households. It will also encourage the consumers to identify and
implement energy efficient technologies.
Currently, the scheme is operational in Victoria, New South Wales and South Australia. The scheme is
planned to be launched in the Australian Capital Territory in 2012.
3.7.3
Low Carbon Communities
The Australian government, under this program, will be providing support to local councils, community
organizations and low income households. The government will be providing the support through the
following funding schemes:
The $206m (AUD200m) Community Energy Efficiency Program will support energy efficiency
upgrades to council and community-use buildings, facilities and lighting.
The $103m (AUD100m) Low Income Energy Efficiency Program will support community
organizations, local councils and energy service companies for the trial of energy efficiency
approaches in low income households.
The $30.9m (AUD30m) Home Energy Saver Scheme (formerly the Household Energy and Financial
Sustainability Scheme) will assist low income households find more sustainable ways to manage
their energy consumption.

Page 34
3.7.4
Green Precincts Fund
The Green Precincts Fund is aimed at supporting projects that encourage energy saving measures at the
community level. The Green Precincts Fund is primarily focused on:
Raising community awareness about energy savings
Encouraging the take-up of energy saving measures including using renewable energy in the home
and community facilities
Delivering direct environmental benefits at project sites through energy efficiency measures
Encouraging and demonstrating innovation in design and use of energy efficiency technology
The Green Precincts Fund was announced during 2008-2009, with funding of $15.5m (AUD15m) over a
period of four years in support of at least 10 high-profile demonstration projects.
3.7.5
Renewable Energy Bonus Scheme
In February 2010, the Renewable Energy Bonus Scheme superseded the Energy Efficient Homes
Package program. The scheme aims to help households to reduce their electricity bills and carbon
emissions.
Households that replace an electric storage hot water system with a solar hot water system are eligible to
claim a rebate of $1,030 (AUD1,000). Households installing a heat pump hot water system are eligible for
a rebate of $6,180 (AUD6,000).
3.7.6
Tax Breaks for Green Buildings
Starting July 1, 2012, eligible businesses investing in improvements to the energy efficiency of their
existing buildings will be eligible to apply for a tax break. The tax break will include specified expenditure
incurred as part of a qualifying retrofit of an existing office building, hotel or shopping center. In order to be
eligible for the tax break, the building will have to make significant improvements in energy efficiency.

Page 35
3.8
Renewable Energy Policy Framework, Australia, State Level Policies and

Incentives
Presently, the tariffs are offered at state level in Australia. Most of the stages in Australia are currently
offering net FITs. The net FIT is offered for surplus energy generated by the solar PV system owners. A
gross FIT is offered for each kWh generated by a grid connected system.
Table 11:
Solar Power Market, Australia, Summary of State-level Feed-in Tariff Programs, 2011
Maximum
Size
Rate Paid (per kWh)
Program
duration
Model
5kW
$0.62 (AUD0.60)
15 years
Net
10kW
$0.56 (AUD0.54)
20 years
Net
Suspended
for
residential;
NET' 1for1 with ActewAGL

or $0.35 (AUD0.34) for large
installations 30kW-200kW
20 years
Gross/Net
Commenced in 2011
$0.21 (AUD0.20)
Net
Northern
Territory
Incentive is available
for 225 rooftop PV
systems in Alice
Springs
$0.47 (AUD0.46) Capped at

AUD0.05 per day, then
reverts to 0.23/kWh
Net
Western
Australia
Commenced on
August 1, 2010.
Capped at 150 MW
5-30kW
$0.21 (AUD0.20) + $0.07

(AUD0.07)/kWh from
Synergy or $0.19 (AUD0.19)
from Horizon
10
Net
Queensland
Commenced in July
2008
5kW
$0.45+ (AUD0.44+)
20 years
Net
New South
Wales
Commenced on
January 1, 2010
$0.62 (AUD0.60)
gross
metering
State
Current status
Victoria
Commences on
November 1, 2009
South
Australia
Commenced on July
1, 2008
ACT
Commenced March
2009
Tasmania
Source: Global Data/ Australian Parliamentary Library
3.8.1
3.8.1.1
South Australia
Feed-in Tariffs
South Australias feed-in scheme was introduced on July 1, 2008. The scheme offered a premium
guaranteed tariff of $0.55 (AUD0.54) per kWh to small customers who supply solar electricity into the grid
Due to FIT granted, the number of grid-connected solar systems has surged from 1,500 to over 8,500
systems in October 2009 in South Australia since the state announced its intention to have a feed-in
scheme.
In October 2009, the government of South Australia decided to revise the solar feed-in scheme. The
government planned to review the solar feed-in scheme after 2.5 years or when a total of 10 MW of solar
power systems linked to the small grid were installed in the country.
3.8.2
3.8.2.1
New South Wales

Feed-in Tariffs
Solar Power
The government of New South Wales initially introduced the state's FIT incentive (called the Solar Bonus
Scheme) on June 23, 2009, but on November 9, 2009; a net FIT system was changed into the gross
model system.
Pays $0.62 (AUD0.60) per KWh on a gross basis
Maximum system size 10kW
Commences January 1, 2010

Page 36
The scheme was amended on October 28, 2010 and currently a gross FIT of $0.21 (AUD0.20) per kWh is
applicable for a solar system with a size of maximum 10kW. This is scheme is scheduled to end in 2017.
Wind
The New South Wales FIT provides a gross tariff of $0.62 (AUD0.60) per kWh for electricity generated
from wind turbines with a capacity of up to 10kW. For customers with net meters, the FIT is provided on a
net basis for electricity exported to the grid in excess of that used on the premises. The consumers with
annual consumption of up to 160 MWh are eligible to claim tariffs under this scheme.
3.8.3
3.8.3.1
Victoria
Feed-in Tariffs
Two programs, a premium FIT for solar and a standard FIT for small-scale renewable energy systems,
have been introduced in Victoria that allow customers to be compensated for the renewable energy they
supply back into the state grid.
Premium Feed-In Tariff: This tariff grants a credit of at least $0.62 (AUD0.60) per kWh to small-scale
solar PV systems of up to 5kW in size for excess electricity supplied back into the grid.
The premium solar FIT commenced on November 1, 2009 and will be provided to consumers for next five
years. The tariff will be provided up to maximum capacity of 100 MW of solar power throughout the state.
Standard Feed-in Tariff: Victorias standard FIT is granted to communities, organizations and small
businesses producing up to 100kW of clean electricity from renewable energy sources.
The standard FIT permits qualifying customers to sign up and avail the standard rate for any additional
electricity they supply back into the states electricity grid. All power retailers with not less than 5,000
customers should offer a standard FIT on certain terms and conditions.
Transitional Feed-in Tariff: Victorias transitional FIT was announced on January 1, 2012 and is applicable
for solar PV installations with a capacity of less than 5kW.
The tariff grants a credit of $0.26 (AUD0.25) per kWh for the excess electricity supplied back into the grid.
This rate is slightly higher than the average retail rate of electricity paid by the consumers. This scheme
mandates all the Victorian electricity retailers with more than 5,000 customers to offer the transitional FIT
scheme.
3.8.3.2
Victorian Renewable Energy Target
The Victorian Renewable Energy Target scheme was a market based instrument implemented to
increase the share of renewable energy generation in Victoria to 10% by 2016. This scheme mandated
the liable parties to contribute towards renewable energy generation by acquiring Victorian Renewable
Energy Certificates (VRECs). In 2010, this scheme merged with the national Renewable Energy Target
scheme.
3.8.3.3
Victorian Energy Efficiency Target
The Victorian Energy Efficiency Target scheme mandates large energy retailers in Victoria to surrender a
specified number of energy efficiency certificates every year. The retailers can either create their
certificates directly or can purchase certificates in a competitive market.
Each certificate represents a reduction of one tonne of GHG emissions and is known as a Victorian
Energy Efficiency Certificate (VEEC). During the first phase of the scheme (2009-2011), the scheme
target is 2.7 million VEECs per annum, increasing to 5.4 million VEECs per annum during the second
three-year phase, starting on January 1, 2012.
3.8.3.4
Sustainable Energy Research and Development Grant program
The sustainable energy R&D grant program was announced in 2006. Under this scheme the Victorian
government has provided up to $10.3 (AUD10m) of grants over a period of three years.
It encouraged the recipients of the grant to develop expertise and intellectual property and to leverage
additional support from the industry. It has granted more than $8.24 (AUD8m) to four major projects.

Page 37
3.8.3.5
Solar Hot Water System Incentives
The Victorian government provides rebates and incentives for:
Replacing a natural gas or Liquefied Petroleum Gas (LPG) water heater with a gas-boosted solar
system
Adding a solar water heater to an existing natural gas or LPG water heater as a preheater
Adding solar panels to an existing off-peak electric water heater either with a pump or by
thermosiphon as a retrofit kit
Replacing an existing wood, briquette or oil fuelled water heater with gas-boosted or electric solar
system. Must be natural gas boosted if available in the area. Existing LPG boosted solar water
heaters can only be replaced with gas boosted systems.
Replacing an electric water heater with gas-boosted or electric solar system (if natural gas is not
available in the area) where the applicant has installed ceiling insulation under the Australian
government's discontinued Home Insulation Program as this makes them ineligible for the Australian
government solar hot water rebate.
The Victorian government provides a rebate for solar hot water systems depending on the size,
performance and relative cost of the installation. The rebate amount varies between $412 (AUD400) and
$1,648 (AUD1,600).
3.8.4
3.8.4.1
Tasmania
Feed-in Tariffs
The current FIT rate for solar power generation in Tasmania is $0.21 (AUD0.20) per kWh. Steps have
been taken to establish a gross FIT system in the state.
3.8.5
3.8.5.1
Queensland
Feed-in Tariffs
The Queensland government Solar Bonus Scheme offers funds to qualifying small consumers for the
excess electricity produced from solar PV exported to the Queensland electricity grid. The scheme was
introduced on July 1, 2008 and offers $0.45 (AUD0.44) per kWh for excess electricity supplied into the
grid.
3.8.6
3.8.6.1
Australian Capital Territory

Feed-In Tariff Scheme
The Australian Capital Territory's (ACT) FIT scheme provides financial support to businesses that install
renewable energy production techniques $0.47 (AUD 0.457) per kWh for up to 30kW systems from July 1,
2010 to June, 2011. The premium price is determined in advance each year.
All ACT electricity customers with production facilities of no more than 30kW can avail this facility. The
incentives offered under the scheme are available to both public and private educational institutions. All
renewable energy technologies can access for the tariff. The scheme will continue for 20 years from
connection of the generator.
The revised ACT FIT scheme was launched on July 12, 2011 and closed at midnight on July 13, 2011.
This scheme was closed because the vast demand created a situation where the cap available was
quickly taken up.
The renewable energy generators can still continue to install renewable power systems, but the new
applicants are no longer eligible for the tariffs which were applicable under the ACT FIT scheme.

Page 38
3.8.7
3.8.7.1
Western Australia
Net Feed-in Tariffs (Residential Feed-in Tariff Program)
After announcing a FIT rate of $0.62 (AUD0.60) per kWh based on a gross model introduced in early
2009, the Western Australian government amended the tariff regulations in June 2009.
In 2010, the government of Western Australia announced net FIT of $0.41 (AUD0.40) per kWh for
electricity generated from wind and supplied to the electricity grid. Only residential applicants are eligible
under this scheme, and will receive the tariffs for a period of 10 years.
This scheme was suspended for new applications, on August 1, 2011, when the small scale renewable
energy capacity for the state crossed the limit of 150 MW.
The table below details the net FITs for eligible installations:
Table 12:
Residential Feed-in Tariffs, Western Australia, 2011
Date of Contractual Agreement
Tariff (per kWh)
Prior to May 19, 2011
$0.41 (AUD0.40)
May 19, 2011 to June 30, 2011; system installed by September 30, 2011
$0.41 (AUD0.40)
July 1, 2011 to August 1, 2011
$0.21 (AUD0.20)
Source: Global Data, Synergy
3.8.7.2
Renewable Energy Buyback Scheme
The Renewable Energy Buyback Scheme was introduced by the government of Western Australia to
provide fair tariffs to owners of renewable energy systems for energy generated, which is in excess of
household consumption, is exported back to the state electricity grid. The scheme runs in parallel with the
Western Australia Net FIT Scheme.
The buyback rates applicable under the scheme vary depending on the electricity provider. The rates are
revised annually and reflect the prevailing residential tariffs.
The table below represents the renewable energy buyback rates paid by the electricity providers in
Western Australia.
Table 13:
Renewable Energy Buyback Rates, Western Australia, 2011
Electricity Provider
Buyback Rates
(AUD/kWh)
Particulars
Synergy
Horizon Power
$0.07 (AUD0.07)
Residential Customers
$0.19 (AUD0.19)
Educational Institutions or non-profit organisations not

registered
$0.16 (AUD0.16)
Educational Institutions or non-profit organisations

registered
$0.18 (AUD0.17)
Source: Global Data, Synergy

Page 39
3.8.7.3
Low Energy Emission Development Fund
The Western Australian government provides financial support to innovative low-emission technologies
through the low energy emission development fund. The state government has allocated more than
$20.6m (AUD20m) of funds to support various projects. The projects funded include:
Wave energy power station
Cooling system power by geothermal energy
Oil Mallee harvester
Bio-algae project
The program was closed for new applications on June 29, 2011. The government will allocate up to
AUD8m during 2011-2012 for the development of new technologies.

Page 40
Renewable Energy Regulatory Framework, China
4.1
Renewable Energy Regulatory Framework, China, Overview
China has been one of the fastest growing industrial economies in recent decades. This rapid
industrialization has forced it to address the issue of GHG emissions over the next few decades. The
National Energy Conservation objective, which requires a reduction of fossil fuel contribution to the total
generation, has already been incorporated in the medium and long term (2020) national plan. Various
policies have been proposed, such as replacing small thermal units with large units in 2007 and
increasing the contribution of renewables sources to the total generation. The successful implementation
of these policies will lead to the closure of many oil-fired and small coal-fired power plants. Chinas 12th
five-year plan includes binding global energy targets, for example: non-fossil fuel resources must reach
11.4% of the countrys total primary energy consumption by 2015, energy consumption per unit of the
Gross Domestic Product (GDP) must decrease to 16% and CO2 emissions per unit of GDP are required
to decrease by 17% by 2015.
The accelerated development of Chinas renewable energy industry is being promoted by a combination
of government encouragement and market guidance. The government of China took financial and
regulatory initiatives to promote renewable energy sources. The main regulatory policy framework for
renewable energy in China includes the national development plan and the Renewable Energy Law.
The medium and long term development plan formulated for renewable energy was published by the
National Development and Reform Commission (NDRC), the planning agency in China, in September
2007. The plan set an obligatory target for developing various renewable energy sources, requiring the
percentage of the total energy consumption generated by renewable energy sources to rise to 10% by
2010 and 15% by 2020.
Chinas renewable energy sector grew from 28,376 MW in 2001 to 124, 537 MW in 2011. The chart below
summarizes the impact of various policies implemented in the country during the period 2004-2012. The
implementation of 70% local content requirement for Chinese wind farms spurred the development of
renewable power in the country, wind in particular. The policy was revoked in 2009.

Page 41
Figure 9:
Renewable Power Market, China, Impact Analysis of Major Policies, 2004-2012

Renewable Energy Certificates (REC)
Essential for states and utilities to meet
their RPO. Trading of RECs in
power exchanges began in March.
National Electricity Policy

Purchase of renewable
power through competitive
bidding process.
Electricity Act 2003
Generation Based Incentive (GBI)

for Wind and Solar Power

by introducing preferential
tariffs and RPS.
Incentive of INR12 ($0.30) / kWh

for SPV, INR10 ($0.25) / kWh
for solar thermal & INR0.5/kWh
for wind.
2004
Years
2003
2006
2009
2008
2007
2005
The Tariff Policy 2006

Fixation of minimum RPO
by SERC. Purchase of
renewable power through
preferential tariffs determined
by SERC.
2011
National Solar Mission

Target of 20 GW of grid
connected solar power
by 2022. Government
also reduced import duty
on equipment used in SPV
& solar thermal projects.
RE Tariff Regulations
Amendment of 2006
Tariff Policy) Amended in
2009 and in 2010.

2012
2010
Accelerated Depreciation
Reduced to 15%
Government reduced the tax
incentives from 80% to 15%.
This move is expected to
slow down growth for wind in
the short term. However, GBI
will continue to drive utility
scale Installations.
National Bioenergy Mission
Will promote biogas and
Biomass based power.
Source: GlobalData
The figure below represents the relative impact of various policies in the country for various renewable
energy technologies including wind, solar PV, small hydro and biopower.
Figure 10: Renewable Power Market, China, Policy Impact on Applicable Renewable Power
Sources
Policy / Incentive / Scheme
Wind
Solar PV
Solar Thermal
Small Hydro
Biopower
Capital Subsidy (Central Financial

Assistance)
Loan Support (through IREDA)
Feed-in Tariff Central Level
(Generation based Incentive)
NA
NA
NA
Feed-in Tariff State Level (Renewable

Power Generation Tariffs)
State Level
Customs and Excise Duty Waiver
High
Medium
Low
Source: GlobalData

Page 42
4.2
Renewable Energy Policy Framework, China, Major Policies and Incentives
In the last decade, China has understood the need for renewable energy and the importance of building a
regulatory framework that supports its initiatives. Various government policies such as the Renewable
Energy Law, Renewable Energy Targets, the Medium to Long Term Renewable Energy Development
Plan and many other support programs have been implemented in order to promote renewable sources of
energy.
The table below details the key developments in policies in renewable energy sector in China.
Table 14: Major Renewable Energy Law Implementation Timelines, China, 2010
Year
2005
2006
2007
Organization
Policy
Key Points
National People's
Congress (NPC)
Renewable Energy
Law
The NPC passed the law in 2005 for its implementation in

2006.
National
Development
and Reform
Commission
Renewable energy
industry
development
instruction list
The list details 88 renewable energy areas (including 35

PV areas) subject to support.
National
Development
and Reform
Commission
Provisional
administrative
measures on pricing
and
cost sharing for
renewable
energy power
generation
The document covers how to calculate FITs for renewable

energy and the FIT system.
National
Development
and Reform
Commission
Administrative
provisions for
renewable energy
power
generation
The document specifies the scope of management

responsibility for the central and local governments, the
scope
of
responsibility for
central
government
organizations, and the responsibilities and obligations of
electric power generation and transmission companies.
Ministry of Finance
Provisional
administrative
measures on the
Renewable Energy
Development Fund
The document specifies the scope for support from the

Renewable Energy Development Fund and explains the
procedures for applications for financial support and their
acceptance. It also clarifies financial support methods and
the scope of their applications and specifies the
responsibility for monitoring and reporting uses of the fund.
Ministry of Finance
and
Ministry of
Construction
Provisional
administrative
measures on the fund
for
renewable energy
applications for
buildings
The document specifies how local government regulatory

organizations should consider applications for subsidies for
projects to use renewable energy in buildings and how
they should appropriate those subsidies.
Ministry of Finance
and Ministry of
Construction
Instructions on
deliberation process of
pilot projects for
renewable energy
applications for
buildings
The document specifies how local government regulatory

organizations should deliberate pilot projects. Approved
projects will be announced annually.
Ministry of Science
and
Technology,
National
Development and
Reform
Commission
Renewable energy and

new energy
international
cooperation plan
The plan promotes international cooperation in research

on renewable energy and new energy priorities.
National
Development
and Reform
Commission
Temporary Measures
of
Regulation on
Renewable
The document provides for how electric power

transmission companies should collect and use renewable
energy surcharges.
Page 43
Energy Surcharge
National
Development
and Reform
Commission
Medium to Long-term
Renewable Energy
Development Plan
The plan sets renewable energy development goals for

2010 and 2020.
2008
National
Development
and Reform
Commission
11th Five-Year
Development Plan for
Renewable Energy
Based on the Medium to Long-term Renewable Energy

Development Plan, the document sets renewable energy
development goals (including modified ones) for 2010 and
provides for specific action plans.
2009
National People's
Congress
Revision of the
Renewable
Energy Law
The revised law was passed on December 26, 2009.
2011
National People's
Congress and
National
Development
and Reform
Commission
The Twelfth five-year

plan
The plan incorporates specific deployment targets for

renewable energy
Source: GlobalData, REEEP
The three most common of the renewable policies prevalent in china are described as:
RPS: RPS allow the government to require all electricity utility companies to generate a stipulated quantity
or capacity of renewables annually, often giving them the option to buy tradable credits for that amount of
energy if they are unable to produce it themselves. The RPS policy is to encourage the development of
Renewable Energy Technology with a separate purchase obligation/standard for various RETs. The
policy creates a mechanism through which market competition can drive down the cost of renewable
energy. Certificate based trading lowers administrative and compliance costs as it increases the ease with
which the electricity utility providers are able to comply with the policy. China adopted RPS in 2005 as it is
the most effective policy due to its low cost and provision of a stable market for renewables.
Feed-In Tariffs: This policy requires electricity utility providers to permit renewable energy plants to
connect to the grid so that the utility companies can purchase electricity produced by renewable
producers. The tariff price is set at or above a minimum price over the market price for the energy and is
guaranteed for a duration to ensure a small profit is gained for the developer. This policy ensures more
investor certainty and stimulates investment. The FIT is implemented under the renewable energy law
and covers capital subsidies, grants/rebates, tax reductions and public investments.
Tendering: This system is a government supervised competitive process to meet planned targets by
making long term power purchase agreements with renewable energy generators. Here both the price
and the renewable energy projects eligible for the governmental support at the specified price are set and
decided by a competitive bidding process. This type of policy ensures reduces investor risk and
uncertainty.

Page 44
Some of the major policies promoting renewable power in China are discussed below.
4.2.1
Renewable Energy Law
On January 1, 2006 the Chinese Renewable Energy Law came into effect, which put forward a
comprehensive renewable energy policy framework. The law served as a stimulus for the tremendous
growth of renewable energy in China. It provides the legislative framework for the future development of
alternative energy in the country with the following objectives:
To increase domestic energy supply
To ensure energy security
To optimize Chinas energy mix
To ensure sustainable economic and societal development of the country
To address the concern for environmental safety
The law introduced number of policies for Chinas renewable energy growth and use, including indicative
renewable energy goals, renewable energy planning, entry of renewable energy products to the market,
grid connection of renewable power generation project, FIT, fiscal and taxation, renewable energy
technology R&D and diffusion.
The Renewable Energy Law introduced some of the major regulations in the field of renewable energy,
such as the Renewable Energy Target Policy, Feed-in Law, Categorized Pricing, Cost Sharing and
Special Fund Mechanisms. These regulations are detailed in the table below.
Table 15: Renewable Energy Law, China, Major Regulations, 2005-2006
Regulation
Brief Detail
Defines the national target for renewable energy development and identifies phased development goals, as
well as clarifying which fields or sectors will be supported, encouraged, constrained, or designated for
investment.
Renewable
Energy Target
Policy
Renewables to account for 15% of the primary energy consumption by 2020.

The accelerated development of Chinas renewable energy industry is promoted by a combination of
government encouragement and market guidance.
Mandate for grid operators to provide grid connection to renewable generators and purchase a portion on
energy from renewable sources. Electricity users are encouraged to voluntarily purchase electricity
generated from renewable energy.
As a condition for energy sale networks monopoly operating and licensed operating, the enforcement of the
Feed-in Law will ensure the development of the renewable energy industrys basic system.
Feed-in Law
This law reduces transaction costs, shortens renewable energy projects market entry lifecycle, and
increases credit for project financing, thereby contributing to overall development of the renewable energy
industry.
Electricity pricing has two interesting features: FITs and tariff surcharges. Tariff surcharges are incurred on
the end-user and go into a separate China fund that is spend on renewable project development.
According to the FIT, a premium of CNY0.25/kWh is now available for biomass power generation projects.
Categorized
Pricing
Mechanism
Cost Sharing
Mechanism
Special Fund
Mechanism
Categorizes the price of power generated according to various costs of different renewable energy
technologies.
Develops and publicizes the reasonable fixed electricity price or bidding price.
Ensures fairness in policy and laws, and ensures that citizens fulfil their obligations and the state fulfils its
responsibility, the extra cost of renewable energy is shared equitably among different regions.
This cost-sharing mechanism effectively resolves the problem of unfair cost burdens between regions and
businesses, thereby promoting the large-scale development and use of renewable energy.
Cost-related bottlenecks in the development and use of renewable energy resolved through special
channels, like a Renewable Energy Special Fund to support such fields that the cost sharing mechanism
cannot cover, such as financial support for renewable energy R&D
The fund supports investments in renewable energy projects by providing grants or subsidizing low interests

Page 45
Renewable Energy Targets

In 2006, China introduced a goal of 15% share of primary energy to be generated from renewables by
2020 from 8% in 2006.
In general, a 15% final energy target implies a larger quantity of renewables than a 15% primary energy
target. However, the second revision to the Chinese target changed the scope from renewables to nonfossil-fuel sources, which includes nuclear. Nuclear power currently provides less than a 0.3% share of
final energy in China, but will increase by 2020, so the net impact on total renewables by 2020 of the
target change is complicated to assess.
About one-third of the countrys total power capacity is anticipated to be generated from renewable
energy sources. The governments draft plan calls for 300 GW of hydropower, 150 GW of wind power, 30
GW of biomass power, and 20 GW of solar PV, for a total of 500 GW of renewable power capacity by
2020. However, 500 GW of renewable power capacity by 2020 is also applied by renewable energy
portfolio standards for major utility companies, on the basis of calculations by the China Renewable
Energy Industries Association.
The table below details different renewable energy targets in China.
Table 16: Renewable Energy Targets, China, 2006-2020
2006
2009
2020
2020
actual
actual
current target
proposed
target
Hydro power
130 GW
197 GW
300 GW
300 GW
Wind power
2.6 GW
25.8 GW
30 GW
150 GW
2 GW
3.2 GW
30 GW
30 GW
20 GW
Technology
Biomass power
Solar PV
Solar hot water
Ethanol
Biodiesel
Biomass pellets
Biogas and biomass gasification
Renewable energy share of final energy
consumption
0.08 GW
0.4 GW
1.8 GW
100 million
m2
190 million
m2
300 million m2
1 million tons
2 million
tons
10 million tons
0.05 million
tons
2 million tons
~0
50 million tons
8 billion
m3/year
44 billion
m3/year
9%
15%
Source: GlobalData, Iea
Feed-In Tariff
Under this scheme, a fixed tariff is added to the price of all renewable energy generation connected to the
grid. Some directives regarding FIT implementation have already been enacted in the country, such as
the Directive on Renewable Energy Power Generation and Directive on Renewable Power Pricing and
Incremental Cost Sharing. Renewable power pricing covers the basic pricing principle by ensuring that the
Internal Rate of Return (IRR) of renewable power projects is greater than the average IRR of a
conventional energy power project. The cost sharing for renewables mandates that all end users share
the extra incremental cost of grid connected power; O&M cost of off-grid renewable power and costs for
the grid extension of the renewable power generation. Cost sharing for renewable power surcharge would
cover cost-sharing implementations like surcharge of CNY0.001/kWh collected by the grid corporations.
These surcharges are normally tax-free.

Page 46
Taxation Measures
The Renewable Energy Law recognized the importance of taxation measures, and requested the relevant
government departments to formulate concrete fiscal and taxation measures such as tax and/or tariff relief
and preferential loans to support Chinas renewable energy industry development. Wind farms now enjoy
a 50% reduction in Value Added Tax (VAT). Other taxation measures in favor of renewable energy
investment and use are under formulation or investigation.
Grid Access
The Renewable Energy Law has several provisions targeting the removal of barriers for entrance of
renewable energy power to the energy markets. Directive on Renewable Energy Power Generation,
issued by the NDRC states that the grid must give priority to the access of renewable energy sources.
The Ministry of Construction has also issued regulations on the installation of solar heating in buildings.
Interconnection Standards
Interconnection standards offer technical protection requirements, equipment specifications, application
process, analytical study requirements, and other rules and standards to assure that renewables can be
effectively and safely connected to the grid. According to the Renewable Energy Law, the renewable
energy electricity producers are supposed to be given priority in regard to the grid. The grid operators are
required to link these producers to the grid within a certain amount of time, failing which fines are implied.
In case the grid is not technically able to receive the electricity produced, then technical works must be
carried out on the grid to allow such connection.
Special Fund for Renewable Energy Development
A Special Fund for renewable energy growth has been offered by the Renewable Energy Law. The
Special Fiscal Fund is a financial facility provided for the growth and use of renewable energy
technologies in China. In June 2006, the Ministry of Finance introduced the Management Method for
Renewable Energy Development Fund for renewable energy projects. The fund helps increase
investments in renewable energy projects by offering grants or subsidizing low interest.
4.2.1.1
Renewable Energy Law Amendments
In the course of 2009, the 2006 Renewable Energy Law experienced several amendments.
First, the new regulation legally binds electricity grid companies to buy the whole renewable electricity
generation and guarantees priority power dispatching to power produced from renewable sources. Grid
companies are simultaneously expected to improve transmitting technologies and enhance grid capacity
to further facilitate the integration of electricity from renewable sources.
In the case of non-compliance with the imposed electricity purchasing mandate, the regulation initiates a
penalty system. Responsive companies are required to pay a fine of an amount double the economic loss
to renewable electricity producers.
Secondly, the amendment the state council energy and finance departments, in collaboration with the
state power regulatory agency, the responsibility to design annual renewable energy power generation
targets.
Thirdly, the amendment to the 2006 Renewable Energy Law initiates the Special Fund for Renewable
Energy that will finance R&D and support mini- and off-grid renewable electricity generation projects in
rural and remote areas. The Special Fund will act as a central mechanism allocating government funding
and redistributing the Renewable Energy Premium, a subsidy set up in 2006 to balance the extra cost of
integrating renewable-sourced power.

Page 47
4.2.2
Medium and Long Term Development Plan for Renewable Energy
The NDRC introduced its Medium and Long Term Development Plan for Renewable Energy in September
2007. The plan introduces goals for the growth of various sources of renewable energy up to 2020, calling
for the proportion of renewable energy to increase to 15% by 2020.
By 2020, under the plan, there should be a development of:
300,000 MW of hydropower
30,000 MW of wind power; specifically, six 1,000 MW wind farms are to be developed by 2020,
located in Xinjiang Province's Dabancheng, Gansu Province's Yumen, the Jiangsu
Province/Shanghai coastal region, Hebei Province's Zhangbei, Jilin Province's baicheng and Inner
Mongolia's Huitengxile
30,000 MW of biomass
1,800 MW of solar power
300 million m2 coverage of solar hot water heaters
44 billion m2 of methane gas per year
50 million tonnes per year (tpy)of biofuels;
The plan was established on the principal that biofuel development has no effect on food security.
However, the focus is on the promotion of non-grain biofuels and the use of land that is not or less
suitable for crop cultivation in order to increase the specific biofuel crops (REI 2005, CWP 2011).
The plan states that the government will adopt certain measures to promote and encourage the
development and consumption of renewable energy. These are inclusive of preferential financial and tax
policies and decrease in taxes for various qualified renewable energy growth activities.
4.2.3
In 2007, the NDRC implemented a law called the Medium and Long-Term Development Plan for
Renewable Energy which mandated that all power generators produce at least 3% of their power from
renewable sources. The law also set a target of producing 10% of Chinas primary energy consumption
though renewable energy sources by 2010 and 15% by 2020. To achieve these targets the plan
committed to invest approximately $200 billion in the renewable energy sector and establish a mandated
market share policy which aims to generate 3% of electricity from non-hydro renewable sources by 2010
and 8% by 2020. The mandated market shares were set to Chinas big five companies including Dating
Corporation, Huaneng Group and Longyuan group making these companies to increase their wind power
generation.
4.2.4
International Science and Technology Cooperation Program for New and

Renewable Energy
The NDRC and the Ministry of Science and Technology (MOST) have initiated the International Science
and Technology Cooperation Program in Renewable Energy to boost Chinese technological
development.
The program aims to introduce cutting-edge technologies in the national market, attract overseas
scientists and develop exchange programs with international research centers.
Specific attention is devoted to research in the fields of solar power generation and solar powered building
structures, biomass gasification and power generation, and large high-efficiency wind turbines for onshore
and offshore projects.

Page 48
4.2.5
Shandong Province Village Renewable Energy Regulations
The Shandong Province Village Renewable Energy Regulations took effect on January 1, 2008, providing
subsidies for specified renewable energy technologies in farming villages.
The regulations require that governments at county level and higher must incorporate special funds into
their yearly budgets, which will be used to subsidize renewable energy facility construction in farming
villages.
Projects eligible for subsidies include the production of methane gas from animal and agricultural waste,
as well as garbage. The methane can be directly used to produce power.
Subsidies will also be provided to villages that use solar power for heat and hot water provision in new or
renovated public buildings, such as schools, hospitals and retirement homes.
The regulations also apply to any non-fossil fuel energy sources, including solar, wind, geothermal, hydro,
biomass and ocean wave energy.
4.2.6
New Carbon Intensity Target
In December 2009, China declared that it would decrease the carbon intensity of its GDP by 40%45% of
the 2005 level by 2020. China aimed to introduce energy-intensity in various sectors individually as part of
its energy-efficiency improvement plans, and the carbon-intensity target can generally be viewed as a
variation and aggregation of these existing energy-intensity targets.
4.2.7
The 12th Five-Year Plan
In the 12th five-year plan, the Chinese government gave specific emphasis to green development,
environmental protection and energy conservation. The plan includes binding global energy targets, with
non-fossil fuel resources reaching 11.4% of primary energy consumption by 2015, energy consumption
per unit of GDP decreasing by 16% and CO2 emissions per unit of GDP decreasing by 17% by 2015.
It also incorporates specific deployment targets for renewable energy as the country will start construction
of 120 GW of hydro and 70 GW of wind power capacity six onshore and two coastal and offshore large
wind projects by 2015. It has also targeted to develop 5 GW of solar energy projects, mainly in Tibet,
Inner Mongolia, Gansu, Ningxia, Qinghai, Xinjiang and Yunnan.
4.3
Financial Incentives and Policy Support for Solar Power, China
Although solar power projects have a much smaller scope than hydropower and wind power projects in
China, a series of declared solar power projects have established a new interest in this sector by
domestic and foreign power developers.
The cumulative installed capacity of solar PV power in the country has increased from 30 MW in 2001 to
2,593 MW in 2011 at a CAGR of 56.2%. The implementation of the One Million Rooftops Sunshine Plan
in the Shandong province and fixed FITs by the NDRC spurred the development of solar PV projects in
China. The figure below represents the annual capacity addition in China during 2001-2011.

Page 49
Figure 11: Solar PV Power Policy, China, Annual Capacity Addition, MW, 2001-2011
1,800
NDRC established fixed FITs for solar
PV projects.
1,600
1,400
1,200
Golden Sun Program was established to provide
subsidies solar PV projects.
MW
1,000
800
Implementation of One Million
Rooftops Sunshine Plan in Shandong
province.
600
400
Establishment of Medium and Long

Term Development Plan for
Renewable Energy. This plan calls
for development of 1800 MW of
solar power by 2020.
200
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Some of the major policies specific to solar are detailed below.
4.3.1
Golden Sun Program
The 2009 Golden Sun program provides subsidies to grid connected and off-grid solar PV power
generation projects and calls for 600 MW of installed PV capacity throughout China. Subsidy schemes
have been designed both at national and provincial levels and were applicable to all projects until 2011.
At the national level, developers of off-grid PV systems are eligible for a subsidy covering 70% of the
installation cost. Grid-connected projects with a 300kW minimum peak capacity are eligible for a subsidy
covering 50% of the cost of installation, transmission and distribution of generated electricity. The subsidy
is applicable to a maximum installed capacity of 20 MW in any given province.
Developers must make sure that the solar plant components (panels, batteries, invertors) are certified by
authorized institutions and that the whole PV system meets the requirements issued by the National Grid
Company to benefit from such financial support.
At provincial level, the program expects each province to set up preferential tariffs for PV generated
electricity individually. To date, Zheijiang and Jiangsu are the only two provinces with a tariff policy.
The Golden Sun project reforms the solar electricity market structure. Access to state-owned concessions
is now submitted to a competitive bidding process in which the best offer determines the approved price
levels.
In June 2011, the Chinese Ministry of Finance amended the solar PV subsidy framework under the
Golden Sun Program. According to the amended program, instead of subsidizing 50% of the cost of
installation, transmission and distribution of generated electricity in grid-connected PV projects, the
projects will receive a fixed tariff. Polysilicon-based modules will receive a subsidy of $1.40 (CNY9/W) and
thin-film modules of $1.24 (CNY8/W).

Page 50
4.3.2
The BIPV Subsidy Program
In 2009, China announced its first solar subsidy program for Building Integrated PV (BIPV). The program
provides upfront subsidies for grid-connected rooftop and BIPV systems with a minimum peak capacity of
50kW benefit from a capital premium determined annually by the government. Eligible installations must
use solar PV modules of minimum efficiency levels (16% for mono-crystalline, 14% for poly-crystalline,
and 6% for amorphous). As part of the program BIPV systems are offered a subsidy of $2.90/W
(CNY20/W) and roof-top installations were offered a subsidy of $2.20/W (CNY15/W). The program was an
instant success as 111 rooftop and BIPV projects with a combined capacity of 91 MW were allocated
subsidies totaling to $0.18 billion (CNY1.2 billion).
In 2010, subsidy levels were reduced to $1.95/W (CNY13/W) for grid-connected rooftop systems and to
$2.55/W (CNY17/W) for BIPV systems.
In January 2012, the government announced that the BIPV systems will receive a subsidy of $1.43/W
(CNY9/W) whereas, the subsidy provided for normal solar PV systems is $1.16/W (CNY7.5/W).
4.3.3
4.3.3.1
Feed-In Tariff for Solar Projects

Central Level
The China Renewable Energy Law has introduced the guiding principles of Chinas FIT system and
requested the government to introduce concrete steps to apply the approach. Some directives aimed to
implement the FIT system, including the Directive on Renewable Energy Power Generation and the
Directive on Renewable Power Pricing and Incremental Cost Sharing. The key elements of the solar FIT
in China are:
Solar projects approved before July 1, 2011 and completed before December 31, 2011 will receive
$0.18/kWh (CNY1.15/kWh), excluding solar thermal.
Solar projects approved after July 1, 2011 but not completed by December 31, 2011 will receive
$0.16/kWh (CNY1/kWh).
Preferential FIT for projects located in Tibet is $0.18/kWh (CNY1.15/kWh).
Competitive bidding for solar concession projects cannot exceed the FITs.
NDRC will periodically adjust tariff rates depending on the availability of investment capital and
technological advances.
4.3.3.2
Province level
Preferential Tariffs for Solar PV for Zhejiang and Jiangsu Provinces

The provinces of Zhejiang and Jiangsu have introduced province-wide preferential tariffs for solar PV. In
Zhejiang, the tariff was introduced as a premium of $0.103/kWh (CNY0.70/kWh) added to the provinceaverage coal power generation price which was $0.07/kWh (CNY0.46/kWh) in 2009 $0.68/kWh,
producing a total tariff of $0.17/kWh (CNY1.16/kWh).
The province of Jiangsu determined higher preferential tariffs in comparison to Zhejiang, and also
introduced a range of tariffs on the basis of technology type: $0.31/kWh (CNY2.1/kWh) for ground-based
systems, $0.54/kWh (CNY3.7/kWh) for roof-top, and $0.63/kWh (CNY4.3/kWh) for building-integrated.
The table below details the solar tariffs in Jiangsu during 2009-2011.
Table 17: Jiangsu Solar PV Preferential Tariffs, China, 2009-2011
2009 (per kWh)
2010 (per kWh)
2011 (per kWh)
Ground-Based Systems
$0.32 (CNY2.1)
$0.26 (CNY1.7)
$0.22 (CNY1.4)
Roof-Top Systems
$0.57 (CNY3.7)
$0.46 (CNY3)
$0.37 (CNY2.4)
Building-Integrated
$0.66 (CNY4.3)
$0.54 (CNY3.5)
$0.45 (CNY2.9)
The preferential tariffs provided by the provinces of Zhejiang and Jiangsu were not considered approved
prices at the national level as provincial governments provide funds for the tariffs through provincial
budgets.

Page 51
Interim Feed-in Tariff for Four Ningxia Solar Projects

The NDRC set up a special FIT of $0.17/kWh, for four PV power plants in the Ningxia province. This
decision stands as a first step in the process of implementing a national FIT for solar PV generated
electricity.
Projects with a capacity of up to 40 MW are being developed by the China Energy Conservation
Investment Corporation (CECICI), the Huadian Group Corporation and Ningxia Electric Power.
4.3.4
Solar PV Bidding Program
The government introduced a competitive bidding program for developing solar PV projects. This program
is establishing new benchmark tariffs for solar PV (so-called approved price levels) based on the
competitive bidding.
4.3.5
Subsidies for Solar PV in Rural Areas
The government of China offers subsidies for the growth of solar PV in remote rural areas in order to
supply electricity. These subsidies take the form of project subsidies, user subsidies and construction
assistance. The funding mainly comes from the central government budget, local government budget and
international aid.
From 1996 to 2000, over 10 solar PV power systems were constructed in Tibet to supply electricity to
villages. The government introduced the Bright Project, which was introduced with pilot projects in
Qinghai, Xinjiang, Inner Mongolia and other provinces. This was assisted by the use of solar PV to supply
electricity to local rural people. The funding for this project was derived from international aid and the local
government budget
The government of China (with the support of the Global Environment Fund) implied the Renewable
Energy Development Program by the World Bank. The program was formulated mainly to develop
household solar PV systems in the nine provinces of Western China, including Inner Mongolia, Xinjiang,
Shaanxi, Yunnan, Ningxia and the west part of Sichuan.
From 2002 to 2004, the government of China introduced the Township Electrification Program, which
mainly used solar PV technology. The program availed a grant of CNY2 billion (approximately $292m)
from the central government and CNY1 billion from the local government. Electricity supply was
introduced to over 700 villages, representing more than 200,000 households and about one million
people.
There are many other initiatives by provincial governments to provide subsidies to promote the use of
solar PV for peasants and herdsmen. In Xinjiang and Qinghai, for example, every installation of solar PV
could receive between $15.4 (CNY100) and $30.8 (CNY200) in subsidies.
Chinas 2007 Medium to Long-term Renewable Energy Development Plan also gave priority to rural
electrification, projecting that the scale of this sector will be 0.15 GW in 2010 to 0.3 GW in 2020, which
accounts for a large part of the countrys whole PV development target.
4.3.6
R&D support for Solar PV
The government of China has also provided various support schemes for the R&D of solar PV. These
include:
Basic R&D Support Scheme (also known as 973 Scheme): The program assists future solar PV
technologies, inclusive of support for the technical and theoretical growth of thin-film and dye sensitized
solar cells.
High-tech R&D Support Scheme (also known as 863 Scheme): This program assists solar PV
technologies which are expected to be commercialized, inclusive of basic equipment and materials for
solar power, cadmium telluride, and copper indium germanium selenium.
Pillar R&D Support Scheme: In accordance to sixth five-year plan, the government of China has
developed key solar PV technologies with the Pillar R&D assistance Scheme providing support in laying
down the foundations for commercialization of solar PV in China.

Page 52
Commercialization Support Scheme: This scheme grants funding for the growth of solar industries. The
companies that use the support scheme are solar PV manufacturers, including Wuxi Suntech, Baoding
Yingli Green Energy, and silicon manufacturers including Sichuan Xinguang Silicon and Luoyang Silicon
High-Tech.
4.3.7
Shandong Province Energy Fund
In 2007, the government of Shandong province introduced a fund of $0.33 billion (CNY2.133 billion) to
promote energy conservation and emissions reduction. The government of Shandong province allocated
this fund to subsidize the construction of solar hot water supply systems.
4.3.8
Shandong Provinces Sunshine Plan
In January 2008, Shandong Province announced the implementation of its One Million Rooftops Sunshine
Plan, designed to stimulate the integration of various renewable energy sources into building construction.
The plan targets use of solar power and geothermal power in buildings. After this, compulsory regulations
came into effect in the cities of Yantai and Jinan, for the integration of solar energy in the construction and
design of certain buildings.
4.4
Financial Incentives and Policy Support for Wind, China
China has witnessed a rapid growth in its wind power capacity. The government of China, in its Medium to
Long-term Renewable Energy Development Plan, took financial and regulatory initiatives to promote
renewable energy sources, setting its wind power generation capacity target at 5 GW for 2010 and 30 GW
for 2020. China achieved its 2010 target in 2007 and the target was revised to 8 GW to 10 GW of wind
power in China by the end of the 11th five-year plan period in 2010. The country doubled its existing wind
power capacity for the fifth year in order to achieve the target.
Various governmental policies such Riding the Wind Program (1996), Wind Power Concession Program
(2002), Reduced VAT and Income Tax (2002), Wind Power Construction Administration (2005) and Law
on Renewable Energy (2006) have aided the development of this technology in China. This has led to
development in the wind manufacturing sector, joint ventures for adopting the merging technologies and
increasing the size of machines.
The following table provides a list of major wind power policies in China.
Table 18: Wind Power Market, China, List of Major Policies
Riding the Wind
Program
Wind Power
Concession Program
Promotes domestication of large scale wind turbines to realize the development of large scale wind
projects.
Provision of special subsidies for field pilot projects of domestically produced wind turbines and f or
the establishment of quality testing systems.
Concession approach for the development of wind power by selecting potential large-scale projects
on the basis of electricity pricing and domestic equipment use level and the investors are selected
through competitive bidding.
Ensured 100% sale of generated wind power and the grid price decided by bidding.
Reduced VAT &

Income Tax
Wind Power
Construction
Administration
Law on Renewable
Energy
Issued by Ministry of Finance and State. Tax Authorities to increase the attractiveness of wind
energy projects in China.
Decreased the VAT for wind generation equipment from 17% to 8.5% and income tax for wind
projects from 33% to 15%.
Formulated by the NDRC, it lays stress on rational use and development of wind power resources
in the nation.
Exclusively for wind power projects with a capacity greater than 50 MW.
Framework policy giving the general conditions for renewable energy development and growth
across the country.
It covers all modern forms of renewable energy, such as wind, solar, water, biomass, geothermal
and ocean energy.

Page 53
The cumulative installed capacity of wind power in the country has increased from 402 MW in 2001 to
60,307 MW in 2011 at a CAGR of 65.1%. The government implemented a 70% local content requirement
for Chinese wind farms in 2004, which was later revoked in 2009. During 2010, the government
announced that it will not extend to companies that produce Wind Turbine Generators (WTG) of capacity
less than 2.5 MW. Additionally, the government also cancelled the provincial approvals for wind power
projects. This resulted in a reduction in the annual capacity addition during 2011. The figure below
represents the annual capacity addition of wind power in the country during the period 2001-2011.
Figure 12: Wind Power Market, China, Annual Capacity Addition, MW, 2001-2011
20,000
18,000
16,000
No extension for
companies producing
WTG of capacity less
than 2.5 MW and
cancellation of
provincial approvals.
14,000
Government introduced a VAT and import tariff rebate on the
import of certain wind turbine components.
MW
12,000
Establishment of Medium and Long
Term Development Plan for
Renewable Energy. This plan calls
for development of 30,000 MW of
wind power by 2020 and also
initiated the growth of wind industry.
10,000
8,000
6,000
4,000
2,000
Establishment of 70% local

content requirement for
Chinese wind farms. It was
later revoked in 2009.
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Some of the major policies specific to wind power are detailed below.
4.4.1
Feed-in Tariffs for Wind Power
The 2005 Renewable Energy Law authorized FITs for wind power based on government guided prices,
which evolved year-by-year as competitive bidding for wind power capacity resulted in standardized or
approved prices, generally on a province-by-province basis.
However, a new FIT regime was established for wind power. Four specific tariffs were established to be
applied on a regional basis dependent on geographic wind resources.
NDRC announced FITs for four categories of onshore wind power projects. The tariffs range from
CNY0.51/kWh, CNY0.54/kWh, CNY0.58/kWh and CNY0.61/kWh with the best wind resource regions
getting the lowest tariff.
After 30,000 full load hours, the project owner will receive the average FIT on the electric market. The
NDRC anticipates to reward a total of 20 such projects by 2010, contributing to the overall target of
achieving 20,000 MW installed capacity by 2020.

Page 54
4.4.2
Domestic Content Requirement
In order to promote domestic manufacturing industries, the Chinese government introduced the Buy
Chinese policy that mandated local governments to source more than 70% of their products and
technologies from domestic sources. The domestic content requirement for wind power in China has
resulted in the development of a strong supply chain and established a favorable environment for wind
power component manufacturers and wind power producers. The domestic content requirement for wind
turbines was withdrawn in 2009.
4.4.3
Wind Power Concession Program
In accordance with the program, domestic and international companies are called to bid for large projects
with a capacity between 100-200 MW. The bidding companies are chosen on the basis of price per kWh
of wind power offered and the percentage of domestic elements used in the wind farm. The wind
concession remains for 25 years and the bid price is offered as a FIT for the first 30,000 full load hours
availed. Based on the wind resource of the site this could be up to 10-15 years.
4.4.4
Low Interest Rate Loans
Low interest loans are an effective central government tool for developing renewable energy in China.
The State Development Bank, Agriculture Development Bank, and Industrial and Commercial Bank are
used by the government to offer low-interest rate loans in support of renewable energy. Under this
program financing for up to 80% of wind power project cost is provided, with the balance of financing
coming as equity investments from the loan beneficiaries. Since 1986, manufacturers of small scale wind
turbines have benefited significantly from this instrument.
4.4.5
VAT and Import Tariff Rebate on Key Wind Turbine Components
To promote the development of the domestic wind industry through technology transfer, the government
introduced a VAT and import tariff rebate on the import of certain wind turbine components. The rebate
came into effect from January 1, 2008, and is applicable to wind turbine manufacturers with annual sales
of more than 50 turbines with a minimum capacity of 1.2 MW. In order to promote investment in wind
energy projects in China, VAT for wind generation equipment has been reduced from 17% to 8.5% and
income tax for wind projects from 33% to 15%. Tax exemption for turbines imported with a capacity of
less than 2.5 MW was also abolished.
4.4.6
Market Entry Standards for Wind Equipment Manufacturers
The Chinese government has introduced specific regulations to improve the efficiency and
competitiveness of the local wind equipment manufacturing market.
The new standard first restricts the wind turbine manufacturing market to entities of a minimum production
capacity of 2.5 MW. New wind turbine manufacturing companies should also demonstrate five years of
experience in large-scale mechanical and electrical industry and establish a professional R&D team.
R&D on testing operations is limited to companies with design capacities while wind turbines
manufacturers should meet the requirements of the wind power technology standards and apply the
Environmental Impact Assessment Law. Such regulations are applicable to grid-connected wind turbines
generators and wind equipment manufacturing companies.
4.4.7
Interim Measure on the Management of Offshore Wind Farms
China's National Energy Administration (NEA) and State Oceanic Administration (SOA) jointly
implemented the Interim Measure on the Management of Offshore Wind Farms, regulating every aspect
of offshore wind development. The 38 related articles stipulate that offshore wind farm concessions must
be allocated through a competitive public bidding process taking into account offered prices, technical
abilities and forecasted performance results.
Developers must be Chinese-funded companies or Sino-foreign joint ventures with at least 50% Chinese
ownership. The regulation also imposes a two year inactivity period from the end of the tender process
before any construction work can start.

Page 55
4.4.8
Offshore Wind Development Plan
In 2009, the NDRC published the Offshore Wind Development Plan, requiring all coastal regions to
establish their own offshore Wind Development plan to 2020. The Development Plan also establishes the
official baseline for offshore projects: The inter-tidal zone for water depth of less than 5m, the offshore
zone for water depth of 5-50m and the deep sea zone for water depth above 50m.
The Jiangsu province was the first to submit its Offshore Wind Plan and, in May 2010, the NEA initiated a
first tender in the Jiangsu province. The tender included two offshore projects of 300 MW capacity each
and two inter-tidal projects of 200 MW capacity each.
The NDRC added offshore wind to the list of top national R&D priorities in the Renewable Energy
Industrial Development Guidelines and the Chinese government announced offshore wind deployment
targets of 5 GW by 2015 and 30 GW by 2030.
4.4.9
Hainan Province Plan for the Construction of Wind Farms
In August 2007, the government of the Hainan Province announced its plan for the construction of wind
farms. The province will construct a total of 1234.5 MW of wind power in 12 locations.
The plan envisages that four to six wind farms, each with a 250-300 MW capacity, will be operating by
2010. Wind power generating capacity is to reach 400 MW by 2015 and 600 MW by 2020.
4.4.10 Provincial Incentives for Wind

In addition to the above-mentioned laws, provincial incentives also play a major role in the development of
wind power in China. Gansu province was the pioneer in establishing a provincial-level bidding policy with
its first tender for 150 MW. The incentive policies differ between provinces, the details of which are given
below:
Table 19: Wind Power Market, China, Provincial Incentives
Province
Name
Inner
Mongolia
Xinjiang
North East
Grid
Subsidy
Policies
Taxation Policies
Pricing Policies
Loan Policies
Others
Land
use
policies: land tax
collected on the
land
actually
occupied;
five
year income tax
holiday
for
occupying
arable land; ten
year land tax
holiday
for
occupying
the
unused land.
CNY20
for
each 100 W
wind
power
generator
purchased;
annual subsidy
of CNY300,000
for
R&D
activities.
3% VAT surtax on
wind
power
generation; income tax
relief for two years.
Tariff calculated
on re-payment of
principle
and
interest.
CNY400m for
wind power by
State Economic
and
Trade
Commission;
Danish
government
loans for wind
power
generation.
CNY50-200 for
small
wind
power
generation unit
purchased;
CNY1m
for
R&D.
Two year tax holidays;

three year tax relief
and five year 15%
income tax for foreign
invested
or
joint
venture
with
an
operational life of 10
years. VAT holiday for
products
exported,
monthly collected VAT
and surtax at 17% and
10% respectively.
Tariff calculated
on re-payment of
principle
and
interest.
6% VAT on wind
generation, no tax
relief for higher power
tariff (CNY900/MWh)
in Henshan, Liaonin;
6% for Donggang,
Liaonin
(CNY100/MWh).
Discounted
loans for wind
power.
Land use fee

paid on the area
actually
occupied
by
wind
power
generation with
preferential
treatment
as
Tariff calculated
on re-payment of
principle
and
interest.

Page 56
foreign invested
businesses.
Guangdong
Zhejiang
VAT collected at CNY

20/MWh and 15% as
income tax.
Tariff calculated
on re-payment of
principle
and
interest,
grid
tariff
of
CNY770/MWh
shared
by
different
subscribers.
Tariff calculated
on re-payment of
principle
and
interest.
Source: GlobalData
4.5
Financial Incentives and Policy Support for Hydro, China
The government of China supports the development of small hydropower plants (with a capacity of up to
50 MW) and has set a target of 180 GW by 2010, and 300 GW by 2020 of hydropower in its five-year
plan. This plan covers both large and small hydropower plants.
Some of the major policies are detailed as follows.
4.5.1
Brightness Program
The Brightness Program was established in 1996. It includes the township electrification and village
electrification program. The township electrification program included 20 MW of solar PV and wind and
200 MW of small hydro projects. The government has invested more than $250m for the development of
renewable energy projects under this program.
4.5.2
Financial Incentives for Small Hydropower
Government incentives have also played a major role in the growth of hydropower in China.
Table 20: Financial Incentives for Small Hydropower, China
Policy
Description
Value Added
Tax (VAT)
6% for small hydropower plants

17% for large hydropower plants
33% (Reduction by 50% or even to zero in few places)
Income Tax
Small hydropower projects can take advantage of government schemes such as the tax free for
two years and tax deduction for three years or tax first and return tax later which help to bolster
sustainability and encourage small hydropower market growth.
Converting debts into shares if necessary for plants running into difficulty with paying back loans.
Introducing public-private participation in the small hydro field.
Others
Areas with electricity supplied by rural hydro power are eligible for the policies offered to large
power grids like CNY0.02/kWh can be obtained in addition to the normal rate for the power
construction fund.
Source: GlobalData, REN21

Page 57
4.5.3
Rural Electrification Policies for Small Hydropower
The Chinese government has issued various policies to support the development of small hydropower
plants in the country. The table below provides a list of policies supporting hydropower.
Table 21:
Rural Electrification Policies for Small Hydropower, China
Policy
Description
This policy was initiated for continuous and steady small hydropower development in the
country.
Self-Management/
Self-Construction
The policy aims to initiate small hydropower construction at country level while listing it in the
local capital construction plan, thereby ensuring the supply of essential goods, materials or
equipment. Small hydropower with a capacity of more than 25 MW and transmission and
transformer projects with voltage level higher than 35 kV fall under the purview of this policy.
Electricity
Supports
Electricity
This policy aims to use the profits earned from newly built small hydropower stations for the
development of small hydropower and local power grids. According to the policy, these profits
cannot be included in local financial budget.
Under this policy, it is proposed to grant loans for procuring equipment for newly built small
hydropower at the low end of the band (around 0.36%).
The repayment period is also extended from five to ten years subject to the requirements.
Local Financing
However, according to the policy terms, the repayment of loans from the profits generated
needs to be prioritized. The amount is again used to support the policy.
Keeping profit from existing plants instead of handing it over to the government for further
expansion of the electricity sector
Localized Policies
The Decision of Acceleration of Rural small hydropower Development issued by the

Guangdong Provincial government in 1996 is a local regulation with restraint of law, which
clearly defines the priorities of development, of integration into grid, and of purchasing of small
hydropower and its mechanism of price and financial subsidies and so on.
The Shanxi Province has also made a stipulation relating to the production quota of small
hydropower and a favorable price for small hydropower.
Source: GlobalData, REN21
4.6
4.6.1
Financial Incentives and Policy Support for Bioenergy, China

Feed-in Tariffs for Biomass
The biomass FIT has been altered by the 2005 law. Previously, the FIT for biomass was CNY0.25/kWh
(3.7 US cents/kWh) premium added to a province-specific coal power generation price. This has been
raised to a new premium of CNY0.35/kWh ($0.52/kWh).
In 2010, the National Development and Reform Commission announced a new national FIT for biomass
power of CNY0.75/kWh, equivalent to $0.11/kWh.
4.6.2
Support for Biomass Power Generation
The Renewable Energy law of 2006 introduced a premium of CNY0.25/kWh for biomass power
generation projects which was later increased to CNY0.35/kWh. In addition, the Medium and Long Term
Development Plan for Renewable Energy calls for the development of 30,000 MW of new biomass
generated power.
4.6.3
Support for Biogas Projects
The Chinese government is providing more support to biogas projects, as part of its renewable energy
targets. This includes the farmers' household biogas project, to the value of 40m RMB, which is helping
certain eligible farming families to have biogas digesters. The VAT for biogas production was also
reduced to 13% in 2003.

Page 58
4.6.4
National Rural Biogas Construction Plan 2003-2010
Chinas 2003-2010 National Rural Biogas Construction Plan was introduced in 2003. The proposal was to
enhance the use of biogas by 11 million households to a total of 20 million households by 2005. By 2010,
China aimed to increase the number of biogas-using households to a total of 50 million. Since 2003, a
government subsidy of CNY1, 000 (about $146) is offered for each biogas digester.
4.6.5
Financial Incentives for Ethanol
According to the law relating to testing for the use of ethanol blended gasoline for automobiles and the
regulations concerning the conduct of testing for the extensive use of ethanol blended gasoline for
automobiles, the following financial incentives are in place for ethanol:
Refund of VAT (appreciation duties)
5% consumption tax on ethanol is exempt
Approximately CNY100 ($14.6) in profit is guaranteed for each million tons of ethanol.
Food reserve subsidies can be granted by supplying food stocks on a preferential basis. Stock food
subsidies are determined by referencing market prices in each relevant area.
The government will cover any loss incurred as a result of adjustment, transportation, or sale of E10.
The Ministry of Finance will offer a particular amount of compensation.
Import duty of 30% was applicable on the imported ethanol. In January 2010, to comply with the WTO
standards, the import duty on denatured ethanol was reduced from 30% to 5%.
4.6.6
Banning of Grain based Ethanol
Since 2002, fuel ethanol producers in China have benefited from subsidies, as well as tax reductions or
exemptions of VAT or import duties. In 2002, most fuel ethanol generated was grain-based. However, a
moratorium on such ethanol plants was imposed as of December 2006 by the NDRC and Ministry of
Finance, banning the use of grain for ethanol production. The governments aim was to substitute nongrain ethanol for grain ethanol, and not to compete with food requirements.
Research by the NDRC found that ethanol refining capacity based on yam, cassava and sweet potato in
Hubei, Hebei, Jiangsu, Jaingxi and Chongqing was increasing.
4.7
4.7.1
Financial Incentives and Policy Support for Energy Efficiency, China

Green Lighting
The Green Lighting Scheme was introduced under the Medium and Long-term Plan for Energy
Conservation Program, in 2004. The Green Lighting Scheme aims to replace ordinary incandescent
lamps with high efficiency Compact Fluorescent Lamps (CFLs), replacing traditional electromagnetic
ballast with electronic ballast and implementing the use of Light Emitting Diodes (LEDs) in traffic lights.
4.7.2
Subsidy for Bulk Purchase of CFL
In 2007, China announced a subsidy for bulk purchases of CFLs which ranges between 30% and 50%.
The subsidy supported the sale of 50 million CFLs across the country for a period of three years.
Furthermore, the Chinese government is considering banning sales and imports of inefficient
incandescent lamps from October 2012 in order to encourage CFLs and other energy efficient lighting.
The NDRC has drawn a five year phase-out plan for incandescent lamps. The phase-out is expected to
start with 100 W incandescent lamps in October 2012 and will extend until October 2016 with the phaseout of 15 W lamps.
In 2006, the country mandated the promotion of high efficiency lighting in public and commercial facilities
th
with an aim to decrease 29 TWh of electricity over the 11 five-year plan period. The country also
encouraged government buildings under reconstruction to meet national energy efficiency standards, with
10% energy savings per unit area.

Page 59
4.7.3
National Building Energy Standard
The National Building Energy Standard was introduced by the central government in 2007 as part of the
11th five-year plan. The standard covers residential, commercial and public buildings.
Construction enterprises that do not comply with the regulation may face penalties of CNY200,000 to
CNY500,000. Design institutes that violate the rules will face penalties in the range of CNY100,000 to
300,000.
4.7.4
Efficiency Upgrade for Appliance Production and Public Lighting
In order to reduce the electricity consumption by 29 billion kWh over the 11th five-year plan, the
government mandated the promotion of high efficiency lighting systems and three primary color
phosphorous lights in public facilities, hotels, shopping centers, office buildings and sports venues. The
renovation of production and assembly lines of high efficiency electronic appliances was also mandated
by the government.
4.7.5
Energy Conservation in Buildings
The program for energy conservation in buildings mandated the quick technical reform of heat supply
systems. It also mandates renewed efforts to promote building energy efficiency technology and related
products.

Page 60
Renewable Energy Regulatory Framework, India
5.1
Renewable Energy Regulatory Framework, India, Overview
The Indian government is concentrating on the development of renewable sources of energy to meet its
energy demand. India is one of the top five countries of the world in terms of renewable energy installed
capacity. By the end of 2011, India is estimated to have a cumulative renewable installed capacity of
22,784.6 MW. In the 11th five-year plan, the Ministry of New and Renewable Energy (MNRE) plans to
increase the renewable energy capacity to 10% of the total energy mix in India by 2012 and further aims
to take it to over 20% in the next decade with a total capacity of over 70 GW. Of the 70 GW capacity,
India wants to have a fair mix of various renewable energy sources providing a level playing field for the
market development of wind, solar and biopower. Wind power is the main contributor, accounting for
30.4% of the total renewable power capacity in 2011; it will continue to grow stronger during 2012-2020.
India launched an ambitious National Solar Mission to facilitate solar power market development of 20
GW by 2022. The MNRE is currently working on a National Biomass Mission to tap 25 GW of bioenergy
potential. In the past five years India has progressed remarkably in expanding its grid interactive power
generation base.
Along with the market development of grid connected power, India is also implementing one of the largest
decentralized off-grid renewable energy programs in the world. The country has over 1.5 million
decentralized solar applications, around 4 million biogas plants and around 4.67 million square meters of
solar thermal applications installed in remote areas. India through its off-grid development programs
demonstrated how renewable energy is the most appropriate, scalable and optimum solution for providing
power to large number of remote places. By supporting off-grid renewable development, India is providing
energy access to deprived communities which are the biggest driver of inclusive growth.
Indias renewable energy sector surged from 2,631.9 MW in 2001 to 22,784.6 MW in 2011. During 2011,
the countrys renewable energy sector witnessed a significant growth with a number of new initiatives.
The wind power sector picked up momentum again by adding over 2,800 MW capacity. Solar PV power
plants of more than 100 MW were installed. Additionally, more than 1,000 remote villages were electrified
through renewable energy installations during 2011.
The chart below summarizes the impact of various policies implemented in the country during the period
2004-2012. Discontinuation of accelerated depreciation for wind is expected to slow down the short term
growth of wind industry in India. However, the availability of generation based incentives for wind and
solar will continue to drive the utility scale installations.

Page 61
Figure 13: Renewable Power Policy, India, Impact Analysis of Policies, 2003-2012
Renewable Energy Certificates (REC)
Essential for states and utilities to meet
their RPO. Trading of RECs in
power exchanges began in March.
National Electricity Policy
Purchase of renewable
power through competitive
bidding process.
by introducing preferential
tariffs and RPS.
2004
Years
Generation Based Incentive (GBI)

for Wind and Solar Power
Incentive of INR12 ($0.30) / kWh
for SPV, INR10 ($0.25) / kWh
for solar thermal & INR0.5/kWh
for wind.
2006
2003
2009
2008
2007
2005
The Tariff Policy 2006

Fixation of minimum RPO
by SERC. Purchase of
renewable power through
preferential tariffs determined
by SERC.
2011

Target of 20 GW of grid
connected solar power
by 2022. Government
also reduced import duty
on equipment used in SPV
& solar thermal projects.
RE Tariff Regulations
Amendment of 2006
Tariff Policy) Amended in
2009 and in 2010.

2012
2010
Accelerated Depreciation
Reduced to 15 %
Government reduced the tax
incentives from 80% to 15%.
This move is expected to
slow down growth for wind in
the short term. However, GBI
will continue to drive utility
scale Installations.
National Bioenergy Mission
Will promote biogas and
Biomass based power.
Source: GlobalData
The figure below represents the relative impact of various policies existing for various renewable power
technologies including wind, solar PV, solar thermal, small hydro and biopower.
Figure 14: Renewable Power Policy, India, Policy Impact on Applicable Renewable Power
Sources
Wind
Solar PV
Solar Thermal
Small Hydro
Biopower
Capital Subsidy (Central Financial

Assistance)
Loan Support (through IREDA)
Feed-in Tariff Central Level
(Generation based Incentive)
NA
NA
NA
Feed-in Tariff State Level (Renewable

Power Generation Tariffs)
State Level
Customs and Excise Duty Waiver
High
Medium
Low
Note: Indian Renewable Energy Development Agency (IREDA)

Source: GlobalData

Page 62
5.2
Renewable Energy Regulatory Framework, India, Major Policies
India is following a three-point approach for the promotion of renewables: financial support for R&D and
the demonstration of technologies, the provision of finance from various financial institutions, and boosting
private sector investment through fiscal incentives, tax holidays, depreciation allowances and
remunerative returns for power fed into the grid. These efforts will provide support in terms of user-fiscal
benefits, such as subsidies to users; tax rebates to users and manufacturers; concession duties and taxes
on renewable energy equipment and low interest long-term loans through the Indian Renewable Energy
Development Agency (IREDA). The government has allocated a number of financial and fiscal policies for
the development of renewable energy.
Some of the basic policies that govern renewable power in India are discussed below.
5.2.1
The Electricity Act (2003) largely contributes to the development of the power sector in India, providing a
comprehensive framework for power development. The key objectives of the electricity act include:
consolidating laws relating to generation, transmission, distribution, trading and the use of electricity;
encouraging competition in the industry; and promoting efficient and environmentally friendly policies,
among others.
The act recognized the role of renewable energy in the country's National Electricity Policy and in standalone systems. Key provisions of the act in relation to renewable energy include:
Preparation of a National Energy Policy and tariff policy for optimal use of resources such as coal,
natural gas, nuclear substances or materials, hydro and renewable sources of energy
The specification by the state electricity commissions, for determining tariff plans to promote
cogeneration and electricity generation from renewable sources
Promotion of cogeneration and the generation of electricity through renewable sources by providing
suitable means for connectivity with the grid and sale, and by specifying a percentage of the total
electricity consumed of the alternative sources for their purchase in the area of a distribution licensee.
5.2.2
Integrated Energy Policy
Under the leadership of the Prime Minister of India and Deputy Chair of the Planning Commission, an
expert committee was established to develop a comprehensive energy policy in 2004. The Integrated
Energy Policy, released in August 2006, includes all aspects of energy, such as, energy security, access
and availability, affordability and pricing, efficiency and the environment.
In relation to renewable energy, the policy proposed:
The phase-out of capital subsidies by the end of the 10th plan linked to the creation of renewable grid
power capacity;
Power regulators to seek renewable energy incentive structures that encourage utility companies to
integrate renewable plants of wind, small hydro and cogeneration with their systems, and then
connect these incentives to power generated;
Power regulators to mandate FITs for alternate energy, as provided under the Electricity Act 2003.
The policy also concentrated on specific types of renewable energy sources, including mini hydro,
wind and wood gasification power.
5.2.3
The Electricity Act (2003) required the State Regulatory Commissions (SERCs) to set Renewable
Portfolio Standards (RPS) for electricity production in each state. 25 out of the 29 Indian states have now
implemented quotas for a renewable energy share of up to 10% and have introduced preferential tariffs
for electricity produced from renewable sources. The minimum percentage of RPS in these states ranges
from 1% in Delhi to 10% in Tamil Nadu for a specified period. The specified period is an average of 3
years, although some states have it for a minimum of 1 year to a maximum of 6 years. States such as
Maharashtra and Rajasthan have penalties for noncompliance of RPS percentages. In West Bengal,

Page 63
Andhra Pradesh, and Maharashtra, distribution companies can waive the penalties if they can prove non
availability of renewable sources.
In 2008, the National Action Plan on Climate Change released by the Indian government included a
proposal for a national renewable energy trading scheme, which would be based on a National
Renewable Portfolio Standard.
In this scheme, states are encouraged to promote the production of renewable power to exceed the
national standard. They then receive certificates for this surplus power, which is tradable with other states
which fail to meet their renewable standard obligations.
In addition, different states have introduced FITs for renewable electricity which are higher than that for
conventional electricity. The table below summarizes renewable obligations specified by SERCs.
Table 22:
Renewable Power Market, India, RPS Specified by SERCs, 2010-2013
State
2010-2011
Andhra Pradesh
2011-2012
2012-2013
5%
5%
5%
Assam
1.40%
2.80%
4.20%
Bihar
1.50%
2.50%
4%
Chattisgarh
5%
5.25%
5.75%
Delhi
1%
Gujarat
5%
6%
7%
1.50%
1.50%
2%
10.10%
11.10%
12.10%
Jammu and Kashmir
1%
3%
5%
Jharkhand
2%
3%
4%
Goa and other Union Territories
1%
2%
3%
Haryana
Himachal Pradesh
Karnataka
7-11%
3%
3%
3%
Kerala
Madhya Pradesh
0.80%
2.50%
4%
Maharashtra
6%
7%
8%
Manipur
2%
3%
5%
Mizoram
5%
6%
7%
Orissa
4.50%
5%
5.50%
Punjab
2.4%
2.9%
8.50%
6%
7.10%
14%
9%
Tripura
1%
1%
2%
Uttar Pradesh
4%
5%
6%
Uttarakhand
4%
4.75%
5.5%
West Bengal
10%
15%
20%-
Rajasthan
Tamil Nadu
Source: GlobalData, Electricity Regulatory Commission of Respective States

Page 64
5.2.4
Tariff Policy 2006
In the extension of the National Electricity Policy of 2005, the Ministry of Power announced the Tariff
Policy in January 2006. It included certain provisions regarding renewable energy and cogeneration. A
minimum percentage is fixed for purchase of energy from non-conventional sources including cogeneration, taking into account resource availability and impact on tariffs. This percentage for purchase of
energy is applicable for the determination of tariffs by the SERCs. The policy also calls for fixing tariffs in
such cases where procurement through the competitive bidding route is not possible.
The procurement of electricity from renewable sources is to be done at preferential tariffs through a
competitive bidding process. These tariffs are determined by the SERCs to make the cost of electricity
generated from renewable sources competitive in comparison to the conventional sources.
In January 2011 the government of India amended the tariff policy of 2006. According to this amendment,
Indian states are obliged to purchase solar power at fixed percentages in two phases. The solar power
obligation will be 0.25% in phase one by 2013, which will eventually reach 3% by 2022. This mechanism
allows solar power-specific RECs to be sold by solar power generation companies to utility providers in
order for them to meet their solar power obligations.
The tariff policy was amended again in June 2011. According to the amended tariff policy 2006:
All hydro electric projects have been exempted from mandatory competitive bidding until 2015 if
certain conditions are met.
Provisions will be made for a level playing field for state controlled hydro projects.
The intra-state transmission sector has been exempted from the mandatory competitive bidding until
January 5, 2015.
Experimental works for a 1200kV HVDC line in the transmission sector have been exempted from the
tariff based competitive bidding.
5.2.5
Ladakh Renewable Energy Initiative
The MNRE has initiated the implementation of the Ladakh Renewable Energy Initiative to promote the
use of renewable energy in the Ladakh region. The government has announced to spend $99.33m
(INR4,730m) on this initiative. This project has been approved by the MNRE to provide energy access
and minimize the use of diesel in this part of the country.
The Ladakh region has good potential of solar and hydro resources, most of which is yet to be explored.
This will result in minimizing the use of diesel, kerosene and fuel-wood.
The initiative plan comprises setting up around 30 small/micro hydro projects aggregating to a capacity of
around 23.5 MW; 300 solar PV projects with a capacity ranging from 5kW to 100kW; 2000 solar PV home
lighting systems and around 40,000 solar thermal projects in the region.
During the last year, solar PV lights and solar water heating systems have been intensively promoted
under this program. Around 930 households have installed solar water heaters for their hot water
requirements.

Page 65
5.2.6
Remote Village Electrification Program
The Remote Village Electrification Program was initiated for the electrification of un-electrified, remote
census villages and remote un-electrified hamlets of electrified census villages through renewable energy
sources where grid connectivity is either not feasible or not cost effective.
The main technological options available for the electrification of remote villages using new and
renewable energy sources are:
Small hydro power plants
Biomass gasification systems in conjunction with 100% producer gas engines or with dual-fuel
engines using non-edible vegetable oils
Non-edible vegetable oil-based engines
Biogas engines
Solar PV power plants
Solar PV home lighting systems
5.2.7
Central Financial Assistance for Renewable Projects
Under this program, a maximum subsidy of 90% of the costs of different renewable energy
devices/systems is provided subject to pre-specified maximum amounts. Besides, there are other
promotional supports and a substantial amount of service charges are provided to the state implementing
agencies.
Central Financial Assistance (CFA) and various subsidies related to renewable sources are summarized
in the tables below. Broadly, they are classified under two categories: Off-Grid Renewable Energy
Program and Grid Interactive Renewable Energy Program.
Table 23:
Renewable Energy Market, India, CFA for Off-grid Renewable Energy Programs,
2011
Remote Village
Electrification:
90% of the costs of electricity generation systems subject to pre-specified maximum and an
overall ceiling of $378 (INR18,000) per household for distributed generation systems.
100% cost of a single light solar PV home lighting system for BPL households.
Small AeroGenerators and

Hybrid Systems
$2,100m (INR0.1m) and $3150 (INR0.15m) per kW for commercial and non commercial
beneficiaries respectively. Higher support of $4,725 (INR225,000) per kW for systems
situated in states of north eastern region, Sikkim and Jammu and Kashmir.
$245.7 (INR11,700) to $308.7 (INR14,700) per plant depending upon the capacity of plant
and CDM benefits availed for states of north eastern region including Sikkim (except plain
areas of Assam).
Family Type Biogas

Plants
$189 (INR9,000) to $210 (INR10,000) per plant depending on capacity of the plant and
CDM benefits availed for plants situated in the plain areas of Assam.
$63 (INR3,000) to $210 (INR10,000) per plant depending on capacity of the plant and CDM
benefits availed for plants situated in Jammu and Kashmir, Himachal Pradesh, Uttrakhand
(excluding Terai region), Nilgiris of Tamil Nadu, Sadar, Kurseong and Kalimpong subdivisions of Darjeeling, Sunderbans, A&N Islands.
$44.1 (INR2,100) to $168 (INR8,000) per plant depending on capacity of plant and CDM
benefits availed for plants situated in any other area.
$3,150 (INR0.15m) per 100 kW for thermal and electro-mechanical applications (with
dual fuel engine).
Biomass Gasifiers for

Rural Areas
$31,500 (INR1.5m) per 100 kW for power generation up to 1MW (with 100% producer gas
engine).
20% higher subsidy for Special Category States and Islands.
$4,200 (INR0.2m) per 300 kW for thermal applications.
Biomass Gasifiers for

Industrial
Applications
$5.250 (INR0.25m) per 100 kW with dual fuel engine.

$21,000 (INR1m) per 100 kW with 100% producer gas engine.
$31,500 (INR1.5m) per 100 kW with 100% producer gas engine in institutions.
Industrial Waste-to-
$42,000 (INR2m) to $0.21m (INR10m) per MWe, depending on technology. 20% higher

Page 66
Energy Plants
subsidy for special category states.
Solar PV/Thermal
Systems
Subsidy of 30% of systems cost and/or 5% interest bearing loans.
Urban Waste to
Energy
$0.21m (INR10m) to $0.63m (INR30m) per MWe, depending on technology. 20% higher
subsidy for special category states.
Micro-Hydro
Plants/Water Mills
$735 (INR35,000) per watermill for mechanical application.

$2,310 (INR0.11m) per watermill for electrical application.
Note: CDM: Clean Development Mechanism; NBMMP: National Biogas and Manure Management programme
Source: GlobalData, MNRE
Table 24:
Renewable Power Market, India, CFA for Grid Interactive Renewable Energy
Programs, 2010
Particulars
Small Hydro Power
projects
Special Category States (NE Region, Sikkim,

Jammu and Kashmir, Himachal Pradesh,
Uttaranchal)
Other States
$47,250 (INR2.250m) x (C )^0.646
$31,500 (INR1.5m) x
(C)^0.646
$52,500 (INR2.5m) x (C)^0.646
$42,000 (INR2.0m) x
(C)^0.646
$37,800 (INR1.8m) x (C)^0.646
$31,500 (INR1.5m) x
(C)^0.646
Biomass Power projects

Bagasse Co-generation
projects by private sector
40 bar and above
Bagasse Co-generation
projects by cooperative/
public/joint sector
40 bar and above
$84,000 (INR4m) per MW
$84,000 (INR4m) per MW
60 bar and above
$0.105m (INR5m) per MW
80 bar and above

(maximum support of INR80m per project)

(maximum support INR80m
per project)
Biomass Power using

Advanced Technologies
$0.252m (INR12m) x (C)^0.646
$0.21m (INR10m) x (C
)^0.646
Wind Power projects
$0.63m (INR30m) x (C )^0.646
$0.525m (INR25m) x
(C)^0.646
20% higher CFA
$31,500 (INR1.5m) per kW

on pro-rata basis or multiple
thereof`
Biomass Gasifiers
Solar PV Power
50% of project cost subject to a maximum of

INR100m/MW for tail-end grid power projects to be
implemented by utility providers or generation
companies in the State sector
Note: x stands for Multiplication, C denotes Capacity


Page 67
The table below summarizes the details on loan disbursals from 2005 to 2012, by the IREDA.
Table 25:
Renewable Power Market, India, IREDA Loan Disbursals, 2005-2012
Year
Sanctioned Amount
Disbursed Amount
2005-2006
$106.26m
$63.63
2006-2007
$123.69m
$86.1m
2007-2008
$173.46m
$116.34m
2008-2009
$312.9m
$161.91
2009-2010
$382.83m
$186.9m
2010-2011
$656.46m
$257.04m
2011-2012
$918.96m
$359.94m
Source: GlobalData, IREDA
The table below summarizes the by-technology details on loans sanctioned from 2006 to 2011, by the
IREDA.
Table 26:
Renewable Power Market, India, Loans Sanctioned by IREDA, 2006-2011
Sector
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
Wind
$55.98m
$89.66m
$153.06m
$246.56m
$314.08m
Hydro
$33.78m
$45.51m
$72.11m
$101.52m
$206.75m
Co-generation
$24.42m
$14.34m
$67.17m
$29.43m
$58.62m
Biomass Power
$3.41m
$3.62m
$10.33m
$4.47m
$11.28m
$8.44
$54.93
$7.01m
$8.27m
Solar Thermal
$2.73m
$10.69m
$1.68m
$1.89m
Waste to Energy
$1.93m
$3.57m
Energy Efficiency and Conservation

Solar PV
Biomethanation from Industrial Effluents

Biomass Briquetting
Biomass Gasification
Miscellaneous
TOTAL
$0.35m
$123.59m
$173.49m
$312.88m
$383.02m
$656.55m

Page 68
The below table summarizes the by-technology details on loans disbursed, from 2006 to 2011, by the
IREDA.
Table 27:
Renewable Power Market, India, Loan Disbursements by IREDA, 2006-2011
Sector
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
Wind
$54.22m
$56.19m
$101.54m
$108.34m
$135.31m
Hydro
$12.26m
$25.07m
$30.99m
$48.09m
$71.5m
Co-generation
$4.13m
$21.81m
$16.04m
$17.53m
$37.89m
Biomass Power
$8.19m
$2.06m
$0.24m
$5.12m
$9.62m
$6.17m
$2.85m
$1.22m
$3.19m
$1.68m
Solar PV
$5.51m
$1.48m
$1.05m
$6.26m
$5.79m
$3.05m
Waste to Energy
$1.29m
$0.59m
$0.09m
$1.06m
Biomethanation from Industrial Effluents
Biomass Briquetting
$0.26m
$86.28m
$116.26m
$161.89m
$186.91m
$257.08
Solar Thermal
Biomass Gasification
Miscellaneous
TOTAL
The table below summarizes the by-technology details on total capacity sanctioned, from 2006 to 2011,
by the IREDA.
Table 28:
Renewable Power Market, India, Capacity Sanctioned by IREDA, 2006-2011
Sector
2007-2008
2008-2009
2009-2010
2010-2011
Wind
$25.29m
Hydro
$11.55m
$45.84m
$110.34
$123.62m
$14.89m
$35.97m
$19.07m
Co-generation
$10.08m
$19.11m
$11.34m
$16.76m
$2.1m
$2.1m
$4.18m
$5.04m
$2.84m
$4.2m
Solar Energy
$0.84m
Waste to Energy
$0.47m
$51.96m
$84.79m
$159.76
$169.14m
Biomass Power
TOTAL

Page 69
5.2.8
Renewable Energy Certificates
Indias Central Electricity Regulatory Commission (CERC) introduced a national level regulation on RECs,
tradable energy instruments, in January 2010. The objective of the regulation is to strike a balance
between rapid economic growth and lower carbon emissions. Under this regulation, renewable energy
generators participating in the scheme will be registered with the CERC. The generators will have the
following two options:
Sell renewable energy at preferential tariffs fixed by the electricity regulatory commission
Separately sell renewable energy related electricity generation and environmental attributes.
If the generator opts for the second alternative, the environmental attributes could be exchanged in a
national-level market in the form of RECs, the value of which will be equivalent to 1 MW of renewable
electricity fed into the grid. Utility companies and power generators that exceed their renewable energy
targets can sell surplus certificates to companies that do not achieve their targets. These RECs are
exchanged in power exchanges in the Indian Energy Exchange (IEX) and Power Exchange of India
Limited (PXIL); they are approved by the CERC within predetermined floor and ceiling prices. Companies
compliance with the REC requirements is monitored by the compliance auditors.
The figure and table below illustrate market clearing volume and market clearing price for non-solar RECs
on the power exchanges approved by CERC.
Figure 15: Renewable Power Market, India, REC Trading, Volume and Price, IEX, March to
December 2011
120,000
4,500
4,000
100,000
3,500
3,000
2,500
60,000
INR
REC
80,000
2,000
40,000
1,500
1,000
20,000
500
Volume
December
November
October
September
August
July
June
May
April
0
March
Price
Source: GlobalData, IEX

Page 70
Table 29:
Renewable Power Market, India, REC Trading, Volume and Price, IEX, March to
December 2011
Months
Market Clearing Volume (Units)
Market Clearing Price (INR/REC)
March
150
3,900 ($81.9)
April
260
1,500 ($31.5)
May
14,002
1,500 ($31.5)
June
15,902
1,505 ($31.61)
July
14,668
1,555 ($32.66)
August
22,096
1,800 ($37.8)
September
41,385
2,300 ($48.3)
October
92,303
2,700 ($56.7)
November
96,154
2,900 ($60.9)
December
105,942
2,950 ($61.95)
Source: GlobalData, IEX
Figure 16: Renewable Power Market, India, REC Trading, Volume and Price, PXIL, March to
December 2011
10,000
3,500
9,000
3,000
8,000
2,500
7,000
2,000
INR
REC
6,000
5,000
1,500
4,000
3,000
1,000
2,000
500
1,000
Volume
December
November
October
September
August
July
June
May
April
0
March
Price
Source: GlobalData, PXIL

Note: no data was available for the month of August

Page 71
Table 30:
Renewable Power Market, India, REC Trading, Volume and Price, PXIL, March to
December 2011
Months
Market Clearing Volume (Units)
Market Clearing Price (INR / REC)
March
274
2,225 ($46.73)
April
May
4,500
1,500 ($31.5)
June
483
1,500 ($31.5)
3,900
1,550 ($32.55)
July
August
September
3,000
1,710 ($35.91)
October
3,201
3,000 ($63)
November
9,373
2,800 ($58.8)
December
5,679
2,950 ($61.95)
Source: : GlobalData, PXIL
5.2.9
Foreign Investment Policy
India has put a lot of effort into the promotion of renewable sources of energy. It has adopted liberal
foreign investment policies in the non-conventional energy sector. Some of the salient features of Indias
foreign investment policies in the renewable sector are as follows:
Foreign investors can enter into a joint venture with an Indian partner for financial and/or technical
collaboration and also for setting up of renewable energy based power generation projects.
Liberalized foreign investment approval regime to facilitate foreign investment and transfer of technology
through joint ventures.
Proposals for up to 74% foreign equity participation in a joint venture qualify for automatic approval.
100% foreign investment as equity is permissible with the approval of the Foreign Investment
Promotion Board (FIPB).
Various chambers of commerce and industry associations in India can be approached for guidance to
investors in finding appropriate partners.
Foreign investors can also set up a liaison office in India.
The government of India encourages foreign investors to set up renewable energy based power
generation projects on a build, own and operate basis.
Furthermore, the government also provides several fiscal and financial incentives for investments in the
wind energy sector. These are available to foreign investors and include capital subsidy, interest rate
subsidy, 80% accelerated depreciation benefit and exemption/reduction in custom duty, sales tax, excise
tax etc.
The policy adopted by the government successfully attracted several European players who are present
in India today, either as a wholly owned subsidiary or joint ventures, or as technology collaborations.
However, most of the investments made were in the form of private equity in manufacturing ventures.
Financial intermediation of other forms such as debt, working capital and other sophisticated financial
services such as insurance, risk management solutions are still lacking. Recently several European banks
and FIs have entered the Indian market.
Most European banks and FIs have not yet realized the attractiveness of the Indian market, or consider it
too risky. Only a couple of existing European banks have invested in Indian wind energy. Therefore, there
remains significant potential for financial intermediation between Europe and India.

Page 72
5.3
Financial Incentives and Policy Support for Solar, India
The cumulative installed capacity of solar PV power increased from 53 MW in 2001 to 248 MW in 2011.
The announcement of the National Solar Mission that aims to achieve 20 GW of solar power capacity by
2020) and introduction of generation based incentives are expected drive the solar industry. The figure
below represents the annual capacity addition in India during 2001-2011.
Figure 17: Solar PV Power Policy, India, Annual Capacity Addition, MW, 2001-2011
120
100
MW
80
Announcement of the National Solar

mission that aims to achieve 20 GW of
solar power capacity by 2020 led to a
sudden spurt in solar power capacity
additions.
60
40
Introduction of financial incentives; INR12/kWh
for plants commissioned before December 31,
2009 and INR11.4/kWh for plants
commissioned after December 31, 2009.
20
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
5.3.1
On June 30, 2008, the Indian Prime Minister released Indias first National Action Plan on Climate Change
(NAPCC) which stated the existing and future policies and programs for climate change mitigation and
adaptation. The plan details the countrys objective to promote solar power through certain objectives:
Specific goals for increasing the use of solar thermal technologies in urban areas, industry, and
commercial establishments;
A goal of increasing the production of PV to 1,000 MW/year
A goal of deploying at least 1,000 MW of solar thermal power generation
The establishment of a solar research center
A goal of increasing international collaboration on technology development and strengthening

domestic manufacturing capacity
A goal of increasing government funding and international support

Page 73
In order to achieve these objectives, NAPCC encompasses the Jawaharlal Nehru National Solar Mission
(NSM). On November 19, 2009, the mission was approved by the government at an estimated cost of
$910.77m (INR43,370m). The NSM target is spread across 13 years and three five-year plans and aims
to achieve 20 GW of installed solar power capacity by 2022. In order to reach this target, the mission
envisioned a strategy that will be implemented in three phases:
In the first phase (2010-2013), the mission will focus on the relatively easy to achieve options of solar
thermal, promoting off-grid systems to provide electricity to serve rural populations and modest capacity
additions in grid-based systems.
The second phase (2013-2017) will focus on the commercial deployment of solar power plants to
aggressively scale-up and increase the penetration levels of solar power in the country. By 2017, the
target of total installed solar power capacity is expected to reach 4-10 GW.
The third phase (2017-2022) will focus on leading solar power to grid parity. Considering the
commercialization of the solar PV technology coupled with the rapid scale-up and cost reductions that are
likely to have occurred in the technology by 2017, the mission plans to achieve 20 GW by 2022. West
Bengal, Gujarat and Rajasthan are the major participants in this mission and are expected to contribute
30% of the 20 GW target by 2022.
The mission will be evaluated at the end of each plan, and at the mid-term point during the 12th and 13th
plans. There will be a review of the capacity and targets for subsequent phases on the basis of cost and
technology trends. The idea behind adopting this approach is to protect the government from over
exposure to subsidies in case the expected cost reduction does not materialize or is more rapid than
expected.
Table 31:
Solar Power Market, India, NSM, Phase Wise Targets, 2010-2022
Phase
Five-Year Plan Period
Plan
Duration
Grid Connected
Target
Off Grid
Applications Target
Solar Collectors
Target
11th and Initial Part of

12th five-year plan Period
2010-13
1000 2000 MW
200 MW
7 million sq
meters
II
12th five-year plan
2013-17
4000 - 10,000
MW
1000 MW
15 million sq
meters
III
13th five-year plan
2017-22
20,000 MW
2000 MW
20 million sq
meters
Source: GlobalData/MNRE
The following are the targets for the Indian national solar mission:
To reach a target of 20,000 MW of solar power by 2022 by creating an enabling policy framework
To increase grid connected solar power and reach a minimum of 1 GW by 2013 and 4 GW by 2017
To create favorable conditions for solar manufacturing capability, particularly solar thermal for
indigenous production and market leadership
To promote programs for off grid applications, reaching 1,000 MW by 2017 and 2,000 MW by 2022
To achieve a solar thermal collector area of 15 million square meters by 2017 and 20 million by 2022.
To deploy 20 million solar lighting systems for rural areas by 2022

Page 74
The following are the funding requirements for the entire mission program:
Table 32:
Solar Power Market, India, NSM Mission Targets, Funding Requirements, INR billion
Application segment
First Stage
Utility grid connected
20,000 MW approx. funding of INR3,000bn
200 MW approx. funding of INR50bn
2,000 MW approx. funding of INR500bn
7 million square meters approx. funding

of INR70bn
20 million square meters approx. funding of

INR200bn
Off-grid applications
Solar thermal collectors
area
Second Stage
1,100 MW approx. funding of INR165bn
Source: : GlobalData, MNRE, IREDA
NTPC Vidyut Vyapar Nigam Limited (NVVN) selected solar power projects totaling a capacity of 620 MW
(connected to 33kV and above grid) through a tariff discounting process in December 2010. The
successful applicants proposed to set up projects of 505 MW capacity in Rajasthan, 65 MW in Andhra
Pradesh, 20 MW in Gujarat, 10 MW in Karnataka and 5 MW each in Orissa, Maharashtra and Uttar
Pradesh. The objective of this process was to lower the tariff for solar power. This process has helped to
reduce the tariff by about 30% over the tariff fixed by the Central Electricity Regulatory Commission. The
projects are to be set up on build, own and operate basis.
During Phase I, Batch II NVVN selected solar power projects aggregating to a capacity of 350 MW
(connected to 33 KV and above grid) through tariff discounting process. The successful applicants have
proposed to set up projects totaling to a capacity of 295 MW in Rajasthan, 25 MW in Maharashtra, 20 MW
in Andhra Pradesh and 10 MW in Tamil Nadu.
The figure and table below summarize the capacity of the upcoming solar power projects by state which
were selected by the NVVN.
Figure 18: Solar Power Market, India, Projects Selected by NVVN, Phase I, Batch I and Batch II
700
600
Capac ity (MW)
500
400
300
200
100
0
Batch 1
Andhra Pradesh
Gujarat
Karnataka
Batc h 2
Maharashtra
Orissa
Rajasthan
Tamil Nadu
Uttar Pradesh
Source: GlobalData, NVVN

Page 75
Table 33:
Solar Power Market, India, Selected by NVVN, Phase I, Batch I and Batch II
State
Batch I
Batch II
Andhra Pradesh
65
20
Gujarat
20
Karnataka
10
Maharashtra
Orissa
Rajasthan
25
500
295
Tamil Nadu
10
Uttar Pradesh
Source: : GlobalData, NVVN
The tariffs quoted, for projects allotted under batch II of phase I are amongst the lowest tariffs in the world.
The average tariff bid was $0.18 (INR8.77) per kWh and the lowest bid received was $0.16 (INR7.49) per
kWh. The tariffs witnessed a reduction of more than 50% compared with the tariffs of over $0.38 (INR18)
per kWh at the start of the mission.
5.3.2
Generation Based Incentives
The MNRE has introduced generation based incentives (feed-in tariffs) for grid connected solar PV power.
The incentives are applicable for grid connected solar PV installations with a minimum power generation
capacity of 1 MW. Generation based incentives provide an incentive of INR12/KWh ($0.24/KWh) in
addition to the power purchase price provided by the state utility subject to a maximum tariff of RS15/KWh
($0.30/KWh) for plants commissioned before December 31, 2009. For plants commissioned after
December 31, 2009 there will a 5% reduction and a rate of RS11.4/KWh ($0.2/KWh) will be paid to the PV
power producers. The FIT is guaranteed for a period of the first 10 years in operation. Generation based
incentives were capped at 50 MW of cumulative solar PV installations in 2012. Some states, such as
Tamil Nadu, Maharashtra and Kerala, have come up with a FIT program to attract PV power projects.
These states provide PV developers with an option of choosing tariffs either under the state scheme or
the generation based incentives scheme. One of the major drawbacks of this scheme is that only 10 MW
of grid interactive solar PV power generation projects can be set up in a single state. This will discourage
developers from coming up with very large scale PV parks and installations.
The generation based incentives system is expected to provide a much needed boost to the grid
connected PV installations in India. A total of over 158 MW of solar PV plants is likely to come online in
the next five years. Generation based incentives have been introduced to provide guaranteed returns to
the PV power producers thereby improving the return on investment for PV projects and reducing the pay
back period for PV projects. The Indian government is likely to review the 50 MW cap in 2012 to
encourage more PV deployments.
In order to support the development of solar PV projects in a number of states, in March 2011, MNRE
announced another scheme to support small grid connected solar PV projects with a capacity of less than
2MW. Under this scheme, generation based incentives are provided to support small scale solar PV
projects connected to the distribution grid (below 33 KV) to the state utility providers. The IREDA has
selected 78 projects with a capacity of around 98 MW for which the state utility providers will be provided
with a generation based incentive of $0.26 (INR12.41) per kWh, when the state utility providers directly
purchase solar power from the project developers. The quantum of generation based incentives to the
utility companies has been fixed, as a difference of the CERC tariff for 2010-2011 INR17.91/kWh ($0.38)
and a reference tariff of INR5.5/kWh ($0.12).

Page 76
5.3.3
Central Financial Assistance for Solar Power Projects
CFA for off-grid solar PV projects in the country is detailed below:

Table 34:
Solar Power Market, India, CFA for Off-Grid Projects

Uttaranchal)
Other States
INR2,400
Nil
Solar PV Home Lighting Systems
INR4,500 to INR8,600 depending on model
INR2,500 to INR4,800
depending on model
Solar PV Street Lighting Systems
INR17,300
INR9,600
Solar PV standalone power plant

with capacity of more than 1 kWp
INR0.225/kWp
INR0.125/kWp
Solar PV standalone power plant

with capacity of more than 10
kWp
INR0.27/kWp
INR0.15/kWp
Particulars
Solar PV Lanterns
CFA for solar PV applications in urban areas of the country is detailed below:
Table 35:
Solar Power Market, India, CFA for Off-Grid Projects
Particulars
Support
Solar PV Streetlight Control Systems
25% of the cost subject to a maximum of INR5,000
Solar PV street/public garden lights (74/75 W

modules)
50% of cost subject to a maximum of INR10,000/- and

INR12,000/- for 11 W and 18 W CFL respectively
Solar PV illuminated hoarding (with maximum

1kWp Solar PV module)
50% cost subject to a maximum of INR15,000/100 W module
Solar PV road studs
50% of cost subject to a maximum of INR1000/-
Solar PV blinker (minimum 37 Wp module)
50% of cost subject to a maximum of INR7,500/-
Solar PV traffic signal (minimum 500 W

module)
50% of cost subject to a maximum of INR0.25m
Solar PV power pack (maximum 1 kW module)
50% of cost subject to a maximum of INR0.1m per kW
5.3.4
India Semiconductor Policy
The semiconductor policy in India will provide Special Capital Incentive Package Scheme (SIPS) for semi
conductor fabrication units and PV equipment manufacturers. The policy offers a capital subsidy of 20%
to PV manufacturers for setting up their production facilities in the Special Economic Zones (SEZ) and
25% subsidy for PV manufacturers setting up their units outside SEZ during the first ten years of
operation. The policy proposes a minimum investment of approximately INR25,000m ($565m) for silicon
wafer manufacturing plants and approx INR10,000m ($225m) for other auxiliary units. This move is
expected to attract a foreign direct investment of approximately INR442.47 billion ($10 billion). The policy
attracted major PV manufacturers and the government received proposals worth approximately
INR796.46 billion ($18 billion) which exceeded expectations. In addition to this, the government policy on
SEZ is attracting manufacturers to set up export oriented PV equipment production units by providing
incentives including tax and duty wavers in order to sustain investors interest.

Page 77
India currently has 40 solar cell and module manufacturers. The country is yet to have silicon feedstock
and wafer manufacturing units. The SIPS has attracted lot of attention and investments in this part of the
solar value chain. With this policy the Indian government has opened up new avenues for PV
development for manufacturers in the country.
The Indian government has received 15 applications of which 12 have received incentives. The following
table provides a list of applications received under the India Semiconductor Policy (2007).
Table 36:
Solar Power Market, India, Applications Received Under the Semiconductor Policy
Company
Investment
Manufactured Items
M/s PV Technologies India Ltd.
INR60bn ($1,500bn)
Solar PV
M/S Titan Energy System Ltd.
INR58.8bn ($1.47bn)
Solar PV and Polysilicon
M/S KSK Surya Photovoltaic Ventures Pvt. Ltd.

M/S Signet Solar Inc.
INR32.1bn ($0.8bn)
Solar PV
INR96.7bn ($2.42bn)
Solar PV
M/S Reliance Industries Ltd.
INR116.3bn ($2.91bn)
M/S Phoenix Solar India Ltd.
INR12bn ($0.3bn)
Solar PV
M/S Tata BP SOLAR India Ltd.
INR16.9bn ($0.42bn)
Solar PV
INR118.2bn ($2.96bn)
Solar PV
M/S TF Solar Power Pvt. Ltd.
INR23.5bn ($0.58bn)
Solar PV
M/S Lanco Solar Pvt. Ltd.
INR129.4bn ($3.2bn)
M/S Solar Semiconductor Pvt. Ltd.
M/S EPV Solar India Pvt. Ltd.

M/S Bhaskar Silicon Pvt. Ltd.
M/S Vasavi Telegence Pvt. Ltd.
M/S EMCO Energy Ltd.
M/S OptiSolar Inc.
INR42.8bn ($1.1bn)
Solar PV
INR59bn ($1.5bn)
INR390bn ($9.75bn)
INR99bn ($2.5bn)
Solar PV
INR54.2bn ($1.4bn)
Solar PV
Source: GlobalData, DIT, MCIT
Of the 12 applicants six proposals have received financial closure. These are: Moser Baer, KSK Surya
Photovoltaic Ventures, Lanco Solar, Bhaskar Silicon and Solar Semiconductors.
5.3.5
Demonstration and Promotion of Solar PV Devices/Systems in Urban Areas and

Industry
The scheme aims:
To create awareness and demonstrate effective alternate solutions for community/institutional solar
based systems in urban areas and industry
To reduce the burden on conventional electricity in cities/towns facing shortages of power, especially
during peak hours
To save highly subsidized diesel in institutions and other commercial establishments, including
industry, that face huge power cuts, especially during day time. (MNR 2010)

Page 78
Types of systems demonstrated/promoted under the program are:
Systems mainly for electricity conservation
Solar street lights
Solar traffic signals
Solar blinkers
Solar power packs/inverters
Solar illuminating hoardings/bill boards
Other systems of community use as felt necessary by the implementing agencies
Systems for abatement of diesel and other fuel oil
Roof top Solar PV systems with or without grid interaction
5.3.6
Development of Solar Cities Scheme
The Development of Solar Cities Scheme, announced on February 28, 2008 aims to promote the use of
renewable energy in urban areas by providing support to the municipal corporations for preparation and
implementation of a road map to develop their cities as solar cities. The objectives of the program are:
To enable/empower urban local governments to address energy challenges at city level
To provide a framework and support to prepare a master plan including assessment of current
energy situation, future demand and action plans
To build capacity in the urban local bodies and create awareness among all sections of civil society
To involve various stakeholders in the planning process
To oversee the implementation of sustainable energy options through public-private partnerships
The program aimed to target 60 cities/towns, at least one in each state, until 2012. The targets will be
achieved by providing support for the preparation of a master plan for a city, setting up of a solar city cell
in the council/administration, organizing training programs/workshops/business meets for various
stakeholders such as the elected representatives of the municipal bodies, municipal officials,
architects/engineers, builders and developers, financial institutions, NGOs, technical institutions,
manufactures and suppliers; and creating public information and awareness.
The program will be implemented through the urban local bodies of respective cities. An expenditure of
INR300m ($6.3m) is expected to be incurred under the program on the development of solar cities from
2008 to 2012. The budget will be provided by the allocated budget for solar thermal energy program
under the demands-for-grants of the MNRE.
Funding up to INR5m ($0.11m) per city/town is available depending upon population and initiatives
decided to be taken by the city council/administration:
Up to INR1m ($21,000) for preparation of a master plan within a year
Up to INR1m ($21,000) for oversight of implementation during five years
Up to INR1m ($21,000) for setting up of solar cell and its functioning for a period of five years
Remaining amount of INR2m ($42,000) to be use over five years for other promotional activities
Based on the proposals received from various states, currently 48 cities have been given in-principle
approval to be developed as solar cities. Out of these, sanctions have been given to 37 cities which have
engaged consultants for preparation of a master plan.

Page 79
Table 37:
Solar Power Market, India, Solar Cities Program, State List of 48 Cities with InPrinciple Approval, 2011
State
Cities with In-Principle Approval
Andhra Pradesh
Vijayawada
Assam
Guwahati
Jorhat
Arunachal Pradesh
Itanagar
Chandigarh
Chandigarh
Chhatisgarh
Bilaspur
Raipur
Rajkot
Gujarat
Gandhinagar
Surat
Goa
Haryana
Panji City
Gurgaon
Faridabad
Himachal Pradesh
Shimla
Hamirpur
Karnataka
Mysore
Hubli-Dharwad
Kerala
Thiruvananthapuram
Kochi
Nagpur
Thane
Maharashtra
Kalyan-Dombiwali
Aurangabad
Nanded
Shirdi
Indore
Madhya Pradesh
Gwalior
Bhopal
Rewa
Manipur
Imphal
Mizoram
Aizawl
Nagaland
Kohima
Dimapur
Orissa
Bhubaneswar
Amritsar
Punjab
Ludhiana
SAS Nagar (Mohali)
Ajmer
Rajasthan
Jaipur
Jodhpur
Tamil Nadu
Coimbatore
Tripura
Agartala
Uttrakhand
Dehradun

Page 80
Haridwar and Rishikesh

Chamoli-Gopeshwar
Uttar Pradesh
Agra
Moradabad
West Bengal
Howrah
Around INR172.3m ($3.62m) has been sanctioned for 37 cities, out of which INR27.5m ($0.58m) has
been released for use by the concerned state nodal agency/municipal corporations.
5.3.7
Energy Efficient Solar/Green Buildings Scheme
The green buildings scheme promotes the construction of energy efficient solar/green buildings in India.
The Indian MNRE and the Energy and Resource Institute (TERI) have entered into a Memorandum of
Understanding (MoU) for the development and operation of the national rating system for energy efficient
homes.
The Green Rating for Integrated Habitat Assessment (GRIHA) will be operated through the GRIHA
secretariat, hosted by TERI. The GRIHA secretariat acts as an independent autonomous body and is
registered by TERI under the Societies Act. Based on TERIs proposal, a non-recurring grant of INR1m
will be provided to the societies adopting green mechanisms for its establishment and infrastructure
facility.
5.4
Financial Incentives and Policy Support for Wind, India
Since 1990s, India has been developing its wind energy market and controls its operations through a
special renewable ministry, the Ministry for Non-Conventional Energy Sources (MNES). However, Indias
renewable policies were not very supportive and as a result, wind energy development in the 1990s was
inconsistent.
A range of policy measures and incentives were announced by the government in support of the
introduction of new wind energy technologies. These were also used to encourage private entrepreneurs
to take up commercial projects. The measures led to significant progress in the wind power sector of
India.

Page 81
The figure below represents the annual capacity additions in India from 2001 to 2011.
Figure 19: Wind Power Policy, India, Annual Capacity Addition, MW, 2001-2011
3,000
2,500
MW
2,000
1,500
Accelerated depreciation, tax holidays,

tax incentives and other subsidies
initiated the growth of wind power
sector in India.
Generation based incentive of INR0.5/kWh
for a period of four to ten years.
1,000
Under the RE Tariff Regulations the Indian
government fixed a levelized tariffs for wind
power generation. It ranges from
INR3.55/kWh to INR5.33/kWh depending on
500
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
5.4.1
Central Government Incentives for Wind Power
Some of the other incentives provided by the central government are given below:
5.4.1.1
Indirect Taxes
Customs Duty
Table 38:
Custom Duty for Wind Equipment and Components, India, 2010
Description of Goods
Rate
i) Wind operated electricity generators up to 30kW and wind operated battery chargers up to 30kW
ii) Parts of wind operated electricity generators for manufacturer/maintenance of wind operated electricity
generators, including:
a) Special bearings
b) Gear box
c) Yaw components
d) Wind turbine controllers
e) Parts of the goods specified at (a) to (d) above
f) Sensors
g) Brake hydraulics
h) Flexible coupling
i) Brake calipers
j) Permanent magnets
5%
5%
5%
5%
5%
5%
25%
25%
25%
25%
5%
iii) Blades for rotor of wind operated electricity generators for the manufacturers/maintenance of wind
operated electricity generators.
5%
iv) Parts for the manufacturer/maintenance of blades for rotor of wind operated electricity generation
5%
v) Raw materials for manufacturer of blades for rotor of wind operated electricity generators
5%
Note: This is Notification No.21/2002-custom dated March 1, 2002, as amended by Notification No.11/2006 customs dated March 1,
2006

Page 82
However, the incentives are subject to conditions:
At the time of importing the importer must, provide a certificate issued by the Ministry of NonConventional Energy Sources recommending that the exemption is granted or certifying that the
goods are required for the specified purposes.
Provides proof to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs
to the effect that:
Wind operated electricity generators up to 30kW or wind operated battery chargers up to

30kW cannot be sold or disposed until two years from the date of importation.
The goods specified at (ii) to (v) must be used for the specified purpose.
If the importer fails to comply with conditions (i), (ii), or both, he/she shall pay an amount
equal to the difference between the duties leviable on the imported goods.
Devices/Systems Exempted from Excise Duty:
Wind operated electricity generators and their components, as well as rotors and wind turbine
controllers.
Water pumping windmills, wind aero-generators and battery chargers.
Exemptions from central sales tax and general sales tax are available on the sale of renewable
energy equipment in various states.
Sales Tax
Exemptions from central sales tax and general sales tax are available on the sale of renewable energy
equipment in various states.
5.4.1.2
Direct Taxes
Accelerated depreciation benefit exempts up to 80% of the project cost in the first year plus additional
depreciation at a rate of 20% for projects that are commissioned after March 2005 with new plants
and machinery.
The government also provides an exemption on income tax on earnings from the project under
section 80 IA for 10 years.
There were reports that the government will discontinue the accelerated depreciation from the next fiscal
year. In April 2012, instead of discontinuing the scheme altogether the government announced reduction
in accelerated depreciation from 80% to 15%.
5.4.2
Generation Based Incentive for Grid Connected Wind Power Projects
Through IREDA, the MNRE will provide a generation based incentive of INR0.5/kWh for a period of four to
10 years, with a cap of INR6.2m, to eligible project promoters. IREDA will disburse the generation based
incentive to the generator on a half yearly basis through e-payments. The total disbursement in a year
should not exceed one fourth of the maximum limit of the incentive (INR1.55m) per MW during the first
four years.
This incentive is over and above the tariff that may be approved by the State Electricity Regulatory
Commissions in various states. In other words, this incentive will not be taken into account when fixing
tariffs.
IREDA has established a generation-based incentive program for wind projects for a period of ten years
starting from the date the project is approved. IREDA will provide GBIs for wind power projects once they
have been commissioned and comply with the guidelines and eligibility conditions. The scheme will be
reviewed once the projects registered by IREDA reach a total a capacity of 49 MW.

Page 83
5.4.3
Financing Guidelines for Wind Energy Projects
The IREDA has established financing guidelines for wind energy projects with effect from 22 May 2007.
The table below summarizes the guidelines.
Table 39:
Sl.
No.
Wind Power Market, India, Guidelines for Projects Financed through IREDA
Financing
Schemes`
Project financing Setting up of wind

farms on
ownership/lease
basis
1.
Interest
Rate
(%) p.a
10.3
Maximum
Repayment
Period
(Years)
10
Minimum
Promoters
Contribution
(%)
30%
Term
Loan
from
IREDA
Remark
Up to
70% of
total
Project
Cost
Projects set up by
manufacturers or their
subsidiaries with minimum
capacities of 5 MW may
benefit from an additional
15% loan secured by
BG/FDR, provided a
generation guarantee is
provided for entire loan
period to the borrowing
company and the same is
assigned to IREDA.
The above interest rates are variable and will automatically reset upon their expiry every
three years from the date of first disbursement.
The option is available at a fixed interest rate for the entire time period of the loan as well
as an additional 1% interest.
A grace period of one year is applicable for the repayment of the principal amount after the
commissioning of the project.
A 0.8% rebate will be provided if the borrower provides a bank guarantee or pledge of
FDR issued by a recognized bank
IREDA has a set of eligibility criteria for obtaining their finance. The parties who are applying for finance
must be public, private limited companies, Non-banking Financial Companies (NBFCs) and registered
societies; individual, proprietary and partnership firms (with applicable conditions); state electricity boards
that are restructured or in the process of restructuring and that are eligible to borrow loans from Rural
Electricity Corporation/Power Finance Corporation (PFC). In addition parties must be profit making
companies with no accumulated losses; whose debt equity ratio is not more than 3:1 (5:1 in the case of
NBFCs under certain conditions); they must not be a defaulter to IREDA and other FIs/banks; there must
be no erosion of the paid-up capital.
The applicants who do not meet the criteria relating to accumulated losses/debt equity ratios shall be
eligible for financing if a bank guarantee or FDR is provided as security for the entire loan.

Page 84
IREDA gave out a list of eligible projects based on which the applicants can borrow money. They are:
Projects demonstrating techno-commercial viability.
Grid connected wind farm projects identified in windy sites appearing in the MNRE/C-WETs list of
potential sites for wind farm projects in the country.
Projects incorporating wind electric generators appearing in the C-WET approved manufacturers list.
Project sites with a mean-annual wind power density of over 200 Watts/Sq.m. at 50m above ground
level.
Projects incorporating new wind electric generators with a capacity 225 kW and above.
The refinancing of projects commissioned up to one year prior to date of registration of the
application at IREDA.
5.4.4
State Government Policies
The state governments introduced policies or incentives for private sector wind projects for the states
Andhra Pradesh, Gujarat, Karnataka, Kerala, Madhya Pradesh, Rajasthan, Maharashtra, Tamil Nadu, and
West Bengal Madhya Pradesh offers the highest tariff in the first year of operation; however, the tariff
decreases in successive years. West Bengal offers a stable tariff of INR4/kWh, higher than all other
states. All the other states offer tariffs in more or less same range.
5.5
5.5.1
Financial Incentives and Policy Support for Bioenergy, India

Biomass Power and Bagasse Co-generation Program
The Biomass Power and Bagasse Co-generation Program was implemented with a main objective of
promoting technologies with optimum use of the countrys biomass resources for grid power generation.
The program encourages the deployment of biomass energy systems in industry for meeting thermal and
electrical energy requirements. The program also promotes distributed power generation through the
supply of any surplus power back to the grid.
The program also provides provisions for Central Financial Assistance for installing biomass gasifiers and
biomass co-generation projects.

Page 85
5.5.2
Central Financial Assistance (CFA) for Biomass Power Projects
CFA for biomass power projects and bagasse cogeneration projects by private/joint/coop./public sector
sugar mills.
Table 40:
CFA for Biomass Power Project and Bagasse Cogeneration Projects by

Private/Joint/Coop./Public Sector Sugar Mills, India
Uttaranchal)
Other States
INR2.5m x (C)^0.646
INR2.0m x (C)^0.646
INR1.8m x (C)^0.646
INR1.5m x (C)^0.646
40 bar and above
INR4m/MW*
INR4m/MW*
60 bar and above
INR5m/MW*
INR5m/MW*
80 bar and above
INR6m/MW*
(maximum support INR80m per project)
INR6m/MW*
(maximum support INR80m
per project)
INR12m x (C)^0.646
INR10m x (C )^0.646
20% higher CFA
INR1.5m/kW on pro-rata
basis or multiple thereof`
Particulars
Biomass Power projects
Bagasse Co-generation projects
by private sector
40 bar and above
Bagasse Co-generation projects
by cooperative/ public/joint
sector
Biomass Power using Advanced

Technologies
Biomass Gasifiers
* For new sugar mills, which are yet to start production and existing sugar mills employing backpressure route/seasonal/incidental
cogeneration, which exports surplus power back to the grid, subsidies shall be one-half of the level mentioned above.
Power generated in a sugar mill (-) power used for captive purpose i.e. net power fed to the grid during season by a sugar mill.
CFA for Bagasse Cogeneration Project in Existing Cooperative Sector Sugar Mills Employing Boiler
Modifications
Table 41:
CFA for Bagasse Cogeneration Project in Existing Cooperative Sector Sugar Mills
Employing Boiler Modifications, India
Project Type
Existing Cooperative Sugar Mill
Minimum Configuration
Capital Subsidy
40 bar and above
INR2m/MW of surplus power*
60 bar and above
INR2.5m/MW of surplus power *
80 bar and above
INR3m/MW of surplus power *
Note: * Power generated in a sugar mill (-) power used for captive purpose i.e. Net power fed to the grid during season by a sugar
mill.
CFA will be provided to the sugar mills who have not received CFA earlier from MNRE under any of its scheme.

Page 86
5.5.3
Capital Subsidy for Biomass Gasifiers and Biomass Co-generation Projects
Table 42:
Capital Subsidy for Biomass Gasifiers and Biomass Co-generation Projects, India
Project Type
Capital Subsidy
Biomass Gasifier for Thermal Application
INR0.2m/kW
Biomass Gasifier for Electrical Applications through Dual Fuel Engines
INR0.25m/kW
Biomass Gasifier Producer Gas Engines with Gasifier System
INR0.8m/kW
Biomass Gasifier Producer Gas Engine alone
INR0.6m/kW
Biomass Co-generation Project
INR2m/kW
5.5.4
Ethanol Production
In October 2007, the government mandated 5% blending of ethanol with petrol. Later, in October 2008,
the mandated blending percentage was increased to 10%. The government also announced a uniform
price of INR21.5/liter for the production of ethanol.
5.5.5
National Biomass Cookstove Initiative
The National Biomass Cookstove Initiative (NBCI) was introduced by MNRE on December 2, 2009 with
the primary aim to enhance the availability of clean and efficient energy for the energy deficient and poor
sections of the country. During 2010-2011, MNRE initiated a pilot project for the demonstration of 400
community cookstoves in Anganwadis, and the Mid-Day Meal schemes in schools in Uttar Pradesh,
Madhya Pradesh, Maharashtra, Andhra Pradesh, Tamil Nadu, Chhattisgarh and Orissa. Two more such
projects are under way for implementation.
5.5.6
National Biofuel Policy
The National biofuels policy was announced in December 2009. The policy aims to facilitate the
development of indigenous biomass feedstock for the production of biofuels. It aims to strengthen the
countrys energy security by mandating 20% blending bio-ethanol or bio-diesel with conventional fuel.
The policy also promotes highly efficient, new generation biofuel conversion technologies based on new
feedstocks. Under this policy the government initiated a National Biofuel Fund which provides financial
incentives, grants and subsidies for the new and second generation feed-stocks, advanced technologies,
conversion processes and production units.
The table below details the status of financial support from the government for biofuels projects.
Table 43:
Renewable Energy Market, India, Financial Support for Biofuel
Financing
Schemes
Interest
Rate (%)
Maximum
Repayment
Period (Years)
Minimum
Promoters
Contribution (%)
Term
Loan
from
IREDA
Remark
IREDA loan is available

only for plants of oil
extraction and transesterification process.
IREDA loan is available
only for plants of oil
extraction and transesterification process.
Ethanol Production
through Biomass/
Sugar Juice/
Molasses
12.75
30
Up to
70% of
project
cost
Biodiesel
Production
12.75
30
Up to
70% of
project
cost

Page 87
5.5.7
Ethanol Blending Program
In January 2003, 5% ethanol blending was made mandatory across nine states and five union territories.
Later in September 2006, the 5% blending was made mandatory in 20 states and eight union territories.
The program was amended in September 2008; the government mandated a 5% blending of ethanol
derived from sugar molasses with petrol across all states in the country. According to the program the
blending ratio will be increased to 10% during the third phase of implementation, as it targets 20%
blending by 2017.
5.5.8
National Biodiesel Mission
The National Biodiesel Commission was set up to look exclusively into issues pertaining to biodiesel and
the development of Jatropha curcas as a feedstock for biodiesel production. The blending targets for
ethanol and biodiesel were proposed to be set at 10% and 20%, respectively, by 2011-2012.
5.6
5.6.1
Financial Incentives and Policy Support for Hydropower, India

Small Hydropower Program (SHPP)
The SHPP aims to install 6 GW of cumulative small hydropower by the end of the 12th five-year plan. The
focus of the program is to reduce the cost of equipment, improve reliability and set up projects with higher
capacity. India has a small hydro potential of 15 GW and MNRE has created a database with 5,718
potential sites with a total capacity of 15,384 MW. MNRE is providing financial support to state
governments/agencies for the identification of new potential small hydropower sites and the preparation of
state perspective plans. MNRE has a target of achieving 1.4 GW of new installed capacity during the 11th
five-year plan. The following table summarizes the status of small hydropower in India.
Table 44:
S.No
Small Hydropower Market, India, States Project Statuses, 2010-2011
State
Potential
Projects Installed
Nos.
Total Capacity (MW)
Nos.
Capacity (MW)
Projects Under Implementation

Nos
Capacity (MW)
Andhra Pradesh
497
560.18
62
189.83
18
61.75
Arunachal Pradesh
550
1,328.68
101
78.835
28
38.71
Assam
119
238.69
27.11
15
Bihar
Chattisgarh
Goa
7
8
9
95
213.25
18
58.3
11
36.31
184
993.11
19.05
1.2
6.5
0.05
Gujarat
292
196.97
12.6
Haryana
33
110.05
70.1
3.4
Himachal Pradesh
536
2,267.81
112
375.385
40
132.2
10
J&K
246
1,417.80
34
129.33
5.91
11
Jharkhand
103
208.95
4.05
34.85
12
Karnataka
138
747.59
111
725.05
18
107.5
13
Kerala
245
704.1
20
136.87
23.8
14
Madhya Pradesh
299
803.64
11
86.16
19.9
15
Maharashtra
255
732.63
39
263.825
15
51.7
16
Manipur
114
109.13
5.45
2.75
17
Meghalaya
101
229.8
31.03
1.7
18
Mizoram
75
166.93
18
36.47
0.5
19
Nagaland
99
188.98
10
28.67
4.2
20
Orissa
222
295.47
10
79.625
3.93
21
Punjab
237
393.23
43
153.2
15
21.4
22
Rajasthan
66
57.17
10
23.85

Page 88
23
Sikkim
91
265.55
16
47.11
5.2
24
Tamil Nadu
25
Tripura
197
659.51
16
94.05
33
13
46.86
16.01
26
Uttar Pradesh
251
460.75
23.3
27
Uttarakhand
444
1,577.44
95
134.12
55
230.65
28
West Bengal
203
396.11
24
98.9
16
79.25
29
A&N Islands
Total
7.27
5.25
5718
15384.15
801
2953.58
271
914.81
st
Note: All figures accurate as of 31 January 2011

5.6.2
Central Financial Assistance for Hydro Power Projects
Table 45:
CFA for Hydro Power Project, India
Particulars
Special Category States (NE Region, Sikkim, Jammu and Kashmir,

Himachal Pradesh, Uttaranchal)
Other States
INR22.5m x (C )^0.646
INR15m x (C
)^0.646
Small Hydro Power

Projects
5.6.3
Financial Support to Private Sector, Joint Sector and Co-operative Society
The MNRE will provide financial assistance to small hydro projects with a capacity of up to 25 MW.
Financial support will be released in two installments:
50% on placement of order for electro-mechanical equipment and disbursement during project
execution
Remaining 50% on project commissioning, commercial generation and performance testing

Table 46:
Financial Support for Hydropower, India, Support for Private Sector, Joint Sector
and Co-operative Society
Areas
Up to 1,000
kW
Above 1 MW and up to 25 MW
Special Category States (NE Region, Sikkim, Jammu

and Kashmir, Himachal Pradesh, Uttaranchal)
INR20,000/kW
INR20m for first MW and additional

INR3m for each additional MW
Other States
INR12,000/kW


Page 89
5.6.4
Financial Support to State Government, Central Government and Public Sector

Units
MNRE will provide financial assistance to small hydro projects with a capacity of up to 25 MW. The state
implementing agency or the owner of the project should bear a minimum of 10% of the approved project
cost.
Table 47:
Financial Support for Hydropower, India, Support to Private Sector, Joint Sector and
Co-operative Society
Above 100KW and up
to 1,000 kW
Areas

Uttaranchal)
INR50,000/kW
INR50m for first MW and

additional INR5m for each
additional MW
Other States
INR25,000/kW
INR25m for first MW and

additional INR4m for each
additional MW
5.6.5
Financial Support for Renovation and Modernization of Small Hydro Projects
MNRE will provide financial assistance for the renovation and modernization of small hydro projects of up
to 25 MW plant capacity set up in government/state/public sector. State implementing agency or the
owner of the project should bear a minimum of 50% of the approved project cost.
Table 48:
Financial Support for Hydropower, India, Support to Government/State /Public

Sector for Renovation and Modernization
Above 100KW and up
to 1,000 kW
Areas

Uttaranchal)
INR25,000/kW

Other States
INR15,000/kW

INR3.5m for each additional MW
5.7
Financial Incentives and Policy Support for Energy Efficiency, India
India has many central and local authorities responsible for compiling the building codes and standards
applicable at national and local level. The most significant codes developed by the national bodies are:
National Building Code (NBC) developed by the Bureau of Indian Standards (BIS). This code covers
all the aspects of building design and construction.
Energy Conservation and Building Codes (ECBC) developed by the Bureau of Energy Efficiency.
Environmental Impact Assessment (EIA) developed by the Ministry of Environment and Finance
(MoEF).

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5.7.1
National Building Code
The NBC was developed by BIS as a guiding code to be followed for formulating and adopting building
by-laws. Currently, the NBC is the reference standard for most construction designs in India. The NBC
was revised by the government in 2005.
The amended version of NBC provides guidance on energy conservation and sustainable development.
The code provides a general guidance on potential energy efficiency aspects of factors like Heating,
Ventilating and Air Conditioning (HVAC) design standards, daylight integration and artificial lighting
requirements.
In order to provide a holistic approach to designing and constructing sustainable buildings, another aspect
on sustainability is being added to the NBC. This aspect will primarily be focusing on the integrated nature
of design.
5.7.2
Energy Conservation Building Codes
ECBC were introduced in May 2005 as a provision of the Energy Conservation Act of 2001. According to
this act, ECBC are mandatory for buildings that have a connected load of 100kW or demand of more than
120kVA. This code primarily focuses on the impact of a buildings energy use and some of the maximum
and minimum limitations on some key building features in order to reduce the energy use of a building.
The code has both prescriptive and performance-based compliance paths. The prescriptive path
illustrates the minimum requirements for the building and energy systems that should be adopted. The
performance based compliance path requires the application of whole building simulation approach to
prove efficiency over base building as described in the code. It also provides minimum standards for
reducing energy demand of the buildings through design and construction practices.
5.7.3
Environmental Impact Assessment
EIA is an important measure for ensuring optimal use of natural resources for sustainable development. It
was made mandatory in the country under the Environmental Protection Act for 29 categories of large
scale developmental activities. The requirements for building energy performance in EIA are a
combination of terms in NBC and ECBC.
5.7.4
Green Building Rating Systems
Currently, there are two major green building rating systems in India:
Leadership in Energy and Environmental Design (LEED) India
The Green Rating for Integrated Habitat Assessment (GIRHA)
The LEED rating of the United States Green Building Council (USGBC) has been adopted by the Indian
Green Building Council (IGBC) in India. Many India specific ratings like LEED-India, Green-Homes, and
Green-Factories have been developed by the IGBC.
GRIHA has been developed jointly by TERI and MNRE. GIRHA focuses on the emerging energy
consuming segment (commercial, residential and institutional buildings). GIRHA has now been adopted
as the national green building rating system. MNRE has also developed incentives to promote this among
architects and builders. MNRE has also developed some programs for the integration of renewable
energy in buildings.
5.7.5
Incentives Offered by State/Central Government
The government offers an accelerated depreciation of 80% on the specified energy efficiency equipment
and concessional excise and customs duty on notified energy conservation equipment to promote energy
efficiency. Some state governments also provide financial assistance for conducting energy audits and tax
holidays for power generation projects under the IPP mode.

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Renewable Energy Regulatory Framework, Japan
6.1
Renewable Energy Regulatory Framework, Japan, Overview
The worlds renewable energy market has seen a rapid development over recent years; however, Japans
renewable energy market has remained inert due to market policies for renewables that are not
sufficiently examined or implemented.
The administration in the country led by the Democratic Party of Japan has several high targets in its
manifesto, including a 25% reduction of greenhouse gases by 2020 from the 1990 levels; the introduction
of a FIT for all quantities and types of renewables; and an increasing the percentage share of renewables
in the primary energy of the country to 10%. With major policies planned, it is expected that the new
administration will show initiative as a leader by increasing investments in the renewable energy sector
and pushing for new measures to deal with global warming issues.
The Japanese government re-launched the residential tariff program and introduced the FIT program in
order to incentivize its renewable power market. Also, through utility green power funds, more than 400
regional governments have announced residential power support programs and utility buy-back schemes
to support the countrys renewable market developments. The countrys solar PV installations are
expected to dominate its renewable power market (excluding hydro) by 2020.
The Japanese government policies have incentives for the wind power, solar power and biomass markets
in the country. The renewable power installed capacity has grown from 11,940 MW in 2001 to 20,282 MW
in 2011.
The chart below summarizes the impact of various policies implemented in the country during the period
2000-2012.
Figure 20: Renewable Power Market, Japan, Impact Analysis of Policies, 2000-2012
Renewable Energy and Energy

Efficiency Partnership (REEEP)
Ensures that policies and regulatory
structures encourage integration of
clean energy and promote efficient use
of energy.
2003
2004
2002
Years
Renewable Portfolio Standard

(RPS)
Obligates electricity retailers to use
certain amount of electricity from
renewable sources. METI has set a
target of 16 TW by 2014.
Japan Renewable Energy Policy

Platform (JREPP)
Aims to source at least 66% of the
overall electricity from renewables
by 2050.
2006
2005
New Purchase System for Solar

Power-Generated Electricity
Obligates utilities to purchase
excess power from residential
solar PV at a price of $0.576/kWh
(JPY48/kWh).
2009
2007
2008
Japan National Energy Strategy

Aims to promote energy source
diversification in the overall energy
sector.
Minimum 30% improvement of
efficiency by 2030.
2010
2012
2011
Feed-in Tariffs
Financial incentive of $0.48
(JPY40/kWh) for nonresidential solar PV
installations.

Source: GlobalData

Page 92
The figure below represents the relative impact of various policies existing for various renewable power
technologies including wind, solar PV, small hydro and biopower.
Figure 21: Renewable Power Market, Japan, Policy Impact on Applicable Renewable Power
Sources
Wind
Feed-in Tariff (FIT) Program
Solar PV
Small
Hydro
Biopower
NA
NA
NA
NA
NA
NA
NA
NA

Tradable Renewable Energy Certificates
System
Tax Reductions
National Targets
R&D Funding
High
Medium
Low
Source: GlobalData
6.2
Renewable Energy Regulatory Framework, Japan, Major Policies
6.2.1
Establishment of NEDO
The New Energy Development Organization (NEDO) was established under the law concerning the
promotion of the development and introduction of alternative energy in 1980. The agency was then
reorganized and incorporated as an administrative agency on October 1, 2003 under the name of New
Energy and Industrial Technology Development Organization.
The primary activities of the agency are:
Development of industrial technology
Development and promotion of new energy and energy conservation technologies
Acquisition of emission reduction credits through the Kyoto Mechanisms
NEDO has actively implemented various R&D projects for PV, wind and other renewable energy
technologies and has played an important role in reducing costs and improving renewable technologies.
6.2.2
New Renewable Energy Target
In 1996, the Japanese government established a 3.1% target of new energy technologies by 2010. The
2010 target included:
4,820 MW of solar PV
3,000 MW of wind
4,170 MW of waste power generation
330 MW to be generated from biomass
4,390,000 kilo liter (kl) of solar thermal use
670,000 kl of biomass thermal use
This target was superseded by the New 2010 Renewable Energy Targets.

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6.2.3
New 2010 Renewable Energy Targets
The 2010 targets for each energy sources are:
Minimum 7.3 million kl of oil equivalent (mkoe) from solar PV
Minimum 10.1 mkoe from wind
Minimum 44.9 mkoe from biomass
Minimum 28.2 mkoe from biomass in heat use
Minimum 65.5 mkoe from other renewables in heat use
6.2.4
Special Measures law for Promoting the Use of New Energy
The New Energy Law relating to special measures to promote and develop new energy use was
introduced in April 1997. As of April 2008, the term new energy is used to refer to renewable energy.
Utility companies that consume new energy are supported financially under this law.
On the basis of this law, a fundamental policy was introduced to determine the measures for each area
that the public, utility companies and governments should consider.
In January 2002, an alteration was made to article one of the act for the New Energy Use section of this
law and biomass energy and cool energy were also included in the law.
6.2.5
Renewables Portfolio Standard (RPS) System
The RPS law is based on the special measures law concerning the use of new energy by electric utility
companies. The law aimed to increase the total use of new energy to 12.2 Terawatt hours (TWh) by 2010
or 1.35% of the electricity produced in the country. The government added further improvements to the
law by creating measures which recognize power generated by solar PV as being worth twice its actual
value for the period between 2011 and 2014. The target of electricity production from renewables was
upgraded to 16 TW by 2014.
The table below details the use targets set by the Ministry of Economy, Trade and Industry (METI) under
the RPS.
Figure 22: Utilization Targets For New Energy, Japan, TWh, 2003-2014
18
16
14
12
TWh
10
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: GlobalData, NEDO

Page 94
Table 49:
Year
Use Targets
Utilization Targets For New Energy, Japan, TWh, 2003-2014

2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
7.3
7.7
8.3
8.7
9.3
10.3
12.2
13.2
14.1
15.1
16
Types of energy covered: Solar, wind, biomass, medium- and small-sized hydro (stations up to 1 MW
capacity), and geothermal.
The RPS system aims to increase the use of new energy annually by imposing an obligation on electricity
retailers to use a certain amount of electricity from new energy.
An obligation-bearing electricity retailer may choose to meet its obligation from the following options:
By generating electricity itself
By purchasing the new energy electricity from another party
By purchasing "New Energy Certificates" from another party
New Energy Certificates

The new energy certificates are managed via an electronic account which can be created by new energy
electricity generators and electricity retailers. In order to acquire new energy certificates, the new
electricity generator or purchasing retailer makes a submission whenever new energy based electricity
has been generated. The government accepts the submission and records it in the electronic account as
new energy certificates (this is to take place on a quarterly basis).
The new energy certificates that have been recorded in the account can then be sold to other generators
and retailers. These certificates are recorded in units of 1 MWh and are valid for a period of 2 years,
including the year in which it was generated.
6.2.6
National Energy Strategy 2006
Japans national energy strategy (2006) aims to promote energy source diversification in the overall
energy sector. The energy targets set under the plan are:
At least another 30% improvement of efficiency will be attained by 2030.
Oil dependence in primary energy mix will be lowered to 40% by 2030.
Oil dependence in transportation fuel to be lowered to 80% by 2030.
6.2.7
Comprehensive Review of Japanese Energy Policy
The Japanese government amended its long-term energy policy to meet its goals set under the Kyoto
Protocol. The amended outlook concentrated on the following areas:
Further development of energy efficiency and conservation policies
Additional introduction of renewable energy
Fuel switching

Page 95
In 2007, the energy efficiency and conservation subcommittee, under the advisory committee for natural
resources and energy, introduced the future direction of the energy saving measures that would be
applied in Japan. Some of the directions for the energy saving measures applicable in Japan are:
The introduction and incorporation of company-based energy management in addition to factorybased regulations, for example, the requirement for countries to submit periodical reports. This act
considers energy conservation efforts as an important part of business management.
The introduction of energy management into franchise chain stores, such as convenience stores, in
which the entire chain of stores are considered as a single unit. The ratio of the targets covered by
the law in the industrial sector will be considerably expanded from the current ratio of approximately
10%.
Increasing the energy efficiency of buildings, and implying the regulations on buildings smaller than
2000m2. Increasing the measures for buildings larger than 2000m2 and labeling of energy efficient
buildings.
Development of support measures
Energy saving efforts made jointly between small companies and large enterprises, and the energy
saving efforts made jointly in industrial complexes are considered a Joint Energy Saving Business. A
system has been established to analyze the energy saving of multiple companies.
Developing support for energy saving measures (focusing on smaller companies, and the industrial
sectors).
Enhancing the energy saving efforts in smaller companies using both the Energy Audit and Energy
Service Company (ESCO).
Development of innovative technology and the promotion of innovative energy conservation

technology development.
6.2.8
Japan Renewable Energy Policy Platform
The Japan Renewable Energy Policy Platform (JREPP) aims to study and suggest proposals for
renewable energy policies. The JREPP was launched in July 2008 by groups involved in renewable
energy initiatives. The following factors and policies were suggested as necessary to fulfill the aims of the
policy:
To set clear medium and long term targets for the renewable energy initiatives taken up by central
and local governments. To create public awareness and make them understand and agree on the
use of renewable energy.
To implement the appropriate strategies to lower the entry barriers and expand the renewable energy
markets.
The below figure summarizes the long term goal of the JREPP for the renewable energy sector in Japan.
Figure 23: JREPP Vision, Japan, Share of Renewables in Electricity Generation, 2050
Biomass
14%
Hydro
14%
Other Sources
34%
Renewables
66%
Solar
18%
Wind
10%
Geothermal
10%
Source: GlobalData, JREPP

Page 96
Table 50:
JREPP Vision, Japan, Share of Renewables in Electricity Generation, 2050
Source
% share
Solar
18
Biomass
14
Hydro
14
Wind
10
Geothermal
10
Source: GlobalData, JREPP
The JREPP aims to produce at least 66% of Japans overall electricity from renewables by 2050.
6.2.9
Feed-in Tariffs for Renewable Energy
In March 2010, a Japanese trade ministry panel proposed implementation of FITs to encourage utility
companies to purchase renewable power at a premium from hydropower plants, wind power plants and
geothermal plant facilities. The government has already announced FITs in relation to the purchase of
solar power.
Japans METI recently announced an increase to the countrys FIT rates. Effective from April 1, 2011,
utility companies will have to pay JPY40/kWh ($0.48) for non-residential PV installations. It is expected
that FIT rates for residential PV installations will be reduced from JPY48/kWh ($0.58) to JPY42/kWh
($0.50).
6.2.10 Support for Deployment of New and Renewable Energy

The METI and the NEDO implemented a program for public bodies or private firms that invest in
advanced new-energy technologies and facilities. The program provides a grant of up to one third (private
sector) or half (public sector) of the installation cost.
Technologies and facilities covered under the program are PV systems, wind power, solar heat,
differential temperature energy, natural gas-cogeneration, fuel cell, waste generation, use of waste heat,
and production of waste fuel.
6.2.11 Subsidy for R&D for New and Renewable Energy

The METI and the Agency for Natural Resources and Energy (ANRE) Japan offer subsidies for R&D
projects that will provide to the diffusion of new and renewable energy. The amount of budget for R&D
into renewable energy (including fuel cells) was JPY30.9 billion ($0.37 billion) for the financial year ended
2008. The R&D projects funded cover various types of new and renewable energy sources in a variety of
sectors such as electricity, heat, transport.
Project for Establishing New Energy and Energy Conservation Visions at Local Level
The project was established in 1998 and continued until 2010. The project budget was offered to assist
the initiatives under taken by local governments and all other organizations by offering subsidies that is
required to support the introduction of new energy.
The project started in 1998 and ended in 2010. The budget in 2008 was JPY900m.($10.8m) It supports
the efforts of local governments and other organizations by providing subsidies that may be required to
facilitate the introduction of new energy and energy conservation measures, including support for
developing energy visions.

Page 97
Project for Promoting the Local Introduction of New Energy

Local governments play an important role in promoting new energy. This program aims to accelerate the
introduction of two programs which are being implemented by local governments: the new energy facility
introduction project and the new energy introduction promotion/dissemination project.
The facility introduction project subsidizes local governments for up to half of equipment or facility
introduction costs and up to JPY20m ($0.24m) for dissemination. Nonprofit organizations are also eligible
for support under the new energy facility introduction project if they introduce effective new energy use
systems at local level. For solar PV systems, the project requires solar cell output to be 10 kW or greater.
Table 51:
New Energy Facility Introduction Project, Japan, Eligible Systems and Requirements
For Local Government
System
Requirements
PV power generation
Solar cell output: 10kW or greater (system capacity rating)

1. Standard areas
Capacity 500kW or greater
Wind power generation
Monitoring of wind conditions: Wind conditions to be monitored for one year or longer at
potential wind turbine installation sites
2. Remote islands (areas specified by the Remote Island Development Act)
Capacity: 300kW or greater
Monitoring of wind conditions: Same as for standard areas
Solar thermal use
Effective heat collection area: 100 m2 or greater

Energy conservation rate: 10% or higher (for air conditioning use)
Heat supply capacity: 6.28 GJ/hr (1.5 Gcal/hr) or greater
Thermal energy
conversion
Energy conservation rate: 10% or higher or total energy efficiency of 80% or higher
Dependency on thermal energy conversion: 40% or higher
1. Standard areas
Dependency on biomass: 60% or higher
Steam turbine generation
Generation efficiency: 10% or higher
Biomass power
generation
Other generation systems

Generation efficiency: 20% or higher
No scale requirements
1. Standard areas
Manufacturing facilities using biomass heat
Usage of biomass heat:
12.56 GJ/hr (3 Gcal/hr) or greater for blast furnace
25.12 MJ/t (6,000 kcal/t) or greater for cement kiln
Biomass heat use
Heat supply systems

Utilized biomass heat: 1.26 GJ/hr (0.3 Gcal/hr) or greater
Biomass cogeneration systems
Energy conservation rate: 10% or higher

Page 98
1. Standard areas
Methane fermentation
Gas production: 300 Nm3/day or greater
Heating value: 18.84 MJ/Nm3 (4,500 kcal/Nm3) or greater
Methods other than methane fermentation
Energy recovery rate: 50% or higher
Heating value:
Biomass-derived fuel
production
12.56 MJ/kg (3,000 kcal/kg) or greater for solidification

16.75 MJ/kg (4,000 kcal/kg) or greater for liquefaction
4.19 MJ/Nm3 (1,000 kcal/Nm3) or greater for gasification
Methane fermentation-type
No scale/efficiency requirements
Methods other than methane fermentation
Energy recovery rate: 50% or higher
Snow/ice heat use
Systems that function exclusively to regulate the flow of cold air and water, as well as
systems devoted to the direct supply of snow/ice heat
Hydroelectric power
generation
Capacity: 1,000kW or less
Geothermal power
generation
Use of binary cycle power generation system
6.3
Financial Incentives and Policy Support for Solar Power, Japan
Japan has the most successful PV industry and mature market in the world. Through aggressive
government policies and subsidies have been the key driving factors for the remarkable growth of Japans
solar PV market. The solar prominence achieved by Japan can be mainly attributed to federal assistance
and more importantly to the undivided support given by the METI for the growth of the Japanese solar PV
market.
Both the federal and local governments in Japan have taken steps to ensure that incentives are properly
structured in order to down keep costs while regulatory processes have become easier to navigate by
businesses and consumers. These governmental initiatives aim to:
Increase R&D investment to significantly reduce the cost of PV systems, thereby lowering the
materials, manufacturing, and installation costs
Increase market opportunities
Japans solar PV market has observed significant growth in terms of cumulative installed capacity which
increased from 453 MW in 2001 to 3,622 MW in 2010, growing at a CAGR of 27% between period 2001
and 2010. The key reasons for remarkable growth witnessed in the Japanese solar PV sector are:
Aggressive and farsighted government policies promoting PV to help meet Kyoto goals
Tight R&D collaboration between industry, government, and academia
The majority of overseas exports helping to drive down PV manufacturing costs in the country
It is expected that Japans solar PV market will continue to maintain the growth traction and reach a
cumulative installed capacity of 28,689 MW by 2020.

Page 99
The cumulative installed capacity of solar PV power in Japan has increased from 452.8 MW in 2001 to
5,118.1 MW in 2011 at a CAGR of 27.4%. The implementation of a new purchase system for solar PV,
introduced during 2009, spurred the development of solar PV power market. The figure below represents
the annual capacity addition in Japan during 2001-2011.
Figure 24: Solar PV Power Market, Japan, Annual Capacity Addition, MW, 2001-2011
1600
1400
Annual Installed Capacity, MW
1200
1000
Establishment of JREPP which aims to

achieve 18% of its total electricity
generation from solar power by 2050.
800
600
400
Renewable Portfolio
Standards initiated the
growth of solar PV
market.
New Purchase System for
solar power obligated the
utilities to purchase surplus
power from residential PV.
200
Shortage in availability of silicon affected the
growth in 2006.
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
6.3.1
Solar Power in Government Office Buildings
In June 2001, the Japanese government established a program to introduce solar power into its
government office buildings to ensure energy security and to promote renewables. The government paid
860m for the installation of 410kW of solar power in 13 eligible offices. This program was superseded by
Emission Reductions from Government Operations Program.
6.3.2
Subsidy for Residential PV Systems
METI launched a new incentive program for solar PV systems. The new scheme offers a subsidy of
JPY70,000/kW (approximately $750/kW) installed to individuals for residential solar PV systems. The
conditions that apply to eligible applicants for this program are:
The installation cost should not be more than JPY70,000/kW (approximately $750/kW)
The solar PV system must have proper quality certification
The solar PV system must have the proper efficiency according to its type
The solar PV system must have a long-term warranty provided by the manufacturer.
6.3.3
New Purchase System for Solar Power-Generated Electricity
A new purchase system for solar power generated electricity came into force on November 1, 2009 and is
regulated by the New and Renewable Energy Division (NRED), the Agency for Natural Resources and
Energy (ANRE) and METI.
Under this scheme, utility companies are obligated to purchase excess power generated from solar PV at
specified rates. Surplus electricity generated from residential PV installations has to be purchased at a
price of 48/kWh. The price to be paid for electricity generated from non-residential PV installations
increased to 40/kWh on April 1, 2011.

Page 100
The scheme is funded by the monthly surcharge collected by electric utility companies.
6.3.4
Fiscal and Tax Incentives for Solar PV Generation
The government also offers a number of fiscal and tax incentives for PV generation in Japan. The major
incentives provided are:
7% tax deduction or immediate amortization is provided
Exception to the fixed asset tax
Mortgage tax breaks for new housing
Tax breaks for remodeling houses to conserve energy
6.3.5
Local Government Initiatives
There are 314 local governments which provide financial support for dissemination of residential solar PV
systems in Japan. Tokyo and lida are two key solar PV cities. Iida had earlier provided subsidized loans
for PV installation and is now granting a maximum subsidy of 100,000 per solar PV system. It hopes to
attain its target to equip 30% of households with PV systems by 2010.
The metropolitan government in Tokyo already has two initiatives in place:
Renewable Energy Strategy aims for the city to generate 20% of its total energy use from renewable
sources by 2020.
Climate Change Strategy: It aims to install 100,000kW residential solar systems using a FIT and
green energy certificate scheme. The initiative began in April 2009.
6.4
Financial Incentives and Policy Support for Wind, Japan
Japans wind power market is one of the leading markets in the Asian region. The market has increased
in recent years due to increased government focus on increasing electricity generation from renewable
energy sources. The wind cumulative installed capacity increased to 2,277 MW in 2010 from 250 MW in
2001. This growth was encouraged by the favorable policies and market subsidies offered by the
Japanese government. The market incentives granted by the Japanese government include both price
paid for electricity generated from renewable plants and capital grants awarded for the clean energy
projects. Government has introduced Power Purchase Agreements (PPA) for a period of up to 15 to 17
years.
Japans wind power sector has recently witnessed declined due to Japans severe weather conditions and
the reform of the Japan Building Code. A number of turbines were severely damaged in 2007 when they
were blown over by typhoons. As a result, a safety standard designed for Japanese meteorological and
geographical conditions is being developed to provide technical measures against typhoons and lightning
strikes and to help future wind turbine developments.
The cumulative installed capacity of wind power in the country increased from 250 MW in 2001 to 2,354
MW in 2011 at a CAGR of 25.1%. The wind power market witnessed a fall in the annual capacity addition
in 2005. This was primarily because many wind turbines were damaged in 2004 due to severe weather
conditions in Japan. The figure below represents the new installed capacity of wind power in the country
during the 2005-2011period.

Page 101
Figure 25: Wind Power Market, Japan, Annual Capacity Addition, MW, 2001-2011
400
Japan Building Code became
effective in June 2007, stipulating
that a wind turbine 60m tall will be
classed as a building. This
complicated the planning
permission procedure.
350
300
Renewable Portfolio
Standards initiated the
growth of renewable energy
sector in Japan.
MW
250
200
Many wind turbines were

damaged in 2004, due to
severe weather conditions.
This led to a slowdown in
the growth of wind power
industry.
150
100
Subsidies for grid interconnection

of wind power projects with a
capacity of more than 2 MW.
50
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
6.4.1
Subsidy Project for Grid Interconnection of Wind Power Generation
The program was started in 2007 and will continue until 2012. Under the program the wind farms and
operators, including local authorities, who install new 2 MW or larger wind turbines are eligible to receive
grants of up to one-third of the cost when they install power storage equipment, such as battery systems.
6.4.2
Research and Development of Next-Generation Wind Power Generation

Technology
The program was started in 2008 and will continue until 2012 with a total budget of JPY210m ($2.3m).
The program aimed to carry out research on basic and applied technologies to facilitate the design of
wind turbines suitable for Japans unique conditions in order to expand the use of wind power generation
technology.
6.5
Financial Incentives and Policy Support for Geothermal, Japan
Japan is one of the most volcanic countries in the world, and therefore has abundant geothermal energy
resources. It is estimated that geothermal energy reserves in Japan comprise about 10% of the global
reserves. Despite this, the total capacity of installed geothermal plants in Japan was just 535 MW in 2010,
relatively small in comparison to other geothermal resource rich countries.
6.5.1
Project on Geothermal Power Generation Development
To promote the development of geothermal energy, NEDO provides geothermal energy developers with
partial subsidies to drill exploratory wells and to install or modify geothermal power generation facilities.
Binary cycle power generation facilities are not eligible for subsidies.
The subsidies available under the project are:
Subsidy of up to 50% of the drilling costs for an exploratory well
Subsidy of up to 20% of the installation costs for power generating facilities.

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6.6
Financial Incentives and Policy Support for Hydro, Japan
Japans hydro power market can be characterized as a matured, large, and self-sufficient market. Japan
has exhausted nearly all available sites for the construction of large-scale hydroelectric power plants, and
so recent developments have been on a smaller scale. With the government support, the conventional
hydro market is at the maturity stage. As the gap between daytime and nighttime demand continues to
grow, the focus of electric power companies is shifting towards the development of pumped-storage
power generation plants to meet peak demand. The share of pumped-storage generation facilities of the
total hydroelectric power capacity in Japan is expected to increase in the forecast period. The installed
capacity of power generated from hydro sources is expected to reach 49,445 MW by 2020.
6.6.1
Project for Developing Small and Medium-sized Hydroelectric Power Plants
This project subsidizes a part of the construction costs for small and medium-sized hydroelectric power
plants by paying part of the plant equipment installation costs in order to reduce up-front generation costs
and promote the diversification of power sources.
The facilities eligible for the subsidy are:
Installation or modification of a standard hydroelectric power plant, except for the pumped-storage
type, with output capacity greater than 1,000kW, but not exceeding 30 MW
Introduction of new technology for the construction of hydroelectric power plants with capacity greater
than 1000kW, but not exceeding 30 MW
6.7
Financial Incentives and Policy Support for Bioenergy, Japan
Japans biomass market is the sixth largest in the world and accounts for about 5% of the global
cumulative biomass installed capacity in 2010. However, the countrys biogas market only holds a minor
share in the global biogas power market. The growing biopower market development in Japan and the
widespread use of MSW for power generation is reflected in the high growth scenario in the Japanese
biomass power market. The Japanese governments pledge to provide $40m funds to the Scaling up
Renewable Energy Program (SREP) in low-income countries under the Strategic Climate Fund is one of
the major initiatives recently undertaken to encourage the growth of its renewable sector. Due to the
recent nuclear plant crisis in Japan (2011), the government plans to place a strong emphasis on the
development of its renewable energy market while framing future energy policies.
In October 2010, the New Energy and Industrial Technology Development Organization worked with the
Ministry of Natural Resources and Environment (MONRE) to develop demonstration projects related to
waste-to-power generation technologies. Private companies such as Hitachi Ltd. and Mitsubishi
Corporation have shown increasing an interest in the biopower market in Japan.
6.7.1
Biofuel Targets
In the national energy strategy, released in May 2006, the New Energy and Industrial Technology
Development Organization announced its goal of decreasing dependency on foreign oil to 80% by 2030.
Biofuels are considered as an important renewable energy resource needed to achieve that goal. The
government of Japan aims to introduce 500,000kl (oil basis) of biofuels by 2010 and to produce next
generation biofuels domestically by 2015, aiming to sell at a price of JPY100 per liter.
6.7.2
Government Incentives for Biofuels
In 2008, the government introduced tax incentives to encourage the use of bioethanol. The act on the
quality control of gasoline and other fuels, which is supervised by the METI, was amended and a tax
system to promote fuels derived from biomass was created.
The gas tax is usually JPY53.8 per liter (approximately $0.60). Under the new tax system, if a fuel
contains 3% bioethanol, the gas tax is lowered by JPY1.6 per liter (approximately $0.02). This tax
measure is effective until March 31, 2013. In order to guarantee bio-gasoline quality, a registration system
for bio-gasoline blenders was implemented.

Page 103
On May 21, 2008 parliament approved a bill to promote the use of biomass resources for the production
of biofuels. The legislation includes tax breaks and financial assistance for biofuel manufacturers and
farmers producing feedstock, such as agricultural co-operatives and private businesses. The government
encourages collaboration of those two groups, and their plans will be monitored by MAFF in order to
qualify for the benefits. Under the scheme, the fixed property tax for newly built biofuel facilities will be
reduced in half for three years. Interest-free loans for a redemption period of 10 years will be provided to
farmers producing feedstock.
The promotion of non-fossil fuel energy and the effective use of fossil fuel acts were created, requiring
energy suppliers, particularly oil distributors and gas suppliers, to use biofuels or biogas.
For clean diesel vehicles, the automobile weight tax and the automobile acquisition tax are exempt for
vehicles weighing less than 3.5 metric tons. These tax breaks are effective until March 31, 2012.
6.7.3
Bio-diesel Policy
With respect to bio-diesel, the government declared that the ratio of Fatty Acid Methyl Ester (FAME) in
light oil should not be more than 5% in order to assure that the fuel is safe to be used in vehicles. This
new requirement was included in the light oil standard under the quality control law in March 2007. The
government of Japan also offered tax concessions for clean diesel vehicles.
6.7.4
In 2004, Japan joined an international initiative known as the methane to markets partnership. The
partnership obliges the governments of the signatory nations to work with the private sector with the aim
of reducing global methane emissions and increasing economic development and energy security. Other
targets of the partnership including enhancing mine safety, decreasing waste, and improving local air
quality. The partnership initially focused on three major methane sources: landfills, underground coal
mines, and natural gas and oil systems. It is anticipated that the efforts of this initiative will help to
decrease the total annual methane emissions by 50 MtCO2 by 2015.
6.7.5
Ethanol (E3) Production Demonstration
The world's first commercial generation of cellulosic bioethanol started on January 16, 2007 in a
Japanese company llaunched for the mass generation of ethanol from waste wood biomass. The plant
has a yearly generation capacity of 1,400 kiloliters of ethanol fuel from 48,000 tons of construction wood
scraps. The wood scraps are broken into chips by machines with the capacity to refine 180 tons per day.
The Ministry of the Environment considers this facility a basis for locally produced bioethanol and plans to
consume the ethanol generated via the large-scale supply of E3 (gasoline containing 3% ethanol) in large
cities. This is part of the Ministry's strategy to enhance the consumption of bioethanol.
6.8
6.8.1
Financial Incentives and Policy Support for Energy Efficiency, Japan

Subsidies for Energy Efficient Hot Water and Air Conditioning Systems
Under this scheme the government provides specific financial or tax incentives for the diffusion of energyefficient hot water supply systems. The government provides subsidies for the purchase of state-of-the-art
hot water systems, such as CO2 cooling medium heat pumps, latent heat recovery, and gas engines. The
amount of subsidy provided equals the price difference between conventional and energy efficient water
heating systems.

Page 104
6.8.2
Financial or Tax Incentives for Energy Efficient Buildings
The government provides several financial or tax incentives for the promotion of energy efficient buildings.
Some of the incentives provided by the Japanese government are given below:
Low interest loan program for energy conservation in the renovation of buildings
Low interest loan program for environmentally friendly buildings
Tax scheme for promoting investments in the reform of the energy demand-supply structure
Low interest rate loan for energy efficient houses
Promoting energy-efficient public housing through the Organization for Promoting Urban
Development, complying with a specified energy conservation level
6.8.3
Energy Conservation and Recycling Assistance Act
The act covers schemes like 3R (Reduce, Reuse, Recycle) concept based activities, additional financial
assistance for overseas energy conservation or CO2 emission reduction projects, and the use of Kyoto
Mechanisms.
6.8.4
Energy Efficiency Standards
The building owners who are applying for provisions of energy efficiency standards are required to adopt
the following energy efficiency measures:
Prevent heat loss from external walls and windows of the building
Effective energy use of air conditioning and other building equipment
Furthermore, the standards promote the dissemination of energy saving efficiency labeling and the
implementation of support measures for buildings that comply with the standards.
It aims for the percentage of newly built houses that meet the energy saving standards to increase to over
50% by the fiscal year ended 2008, and for newly built buildings (other than houses) to increase to over
80% by the fiscal year ended 2006.

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Renewable Energy Regulatory Framework, South Korea
7.1
Renewable Energy Regulatory Framework, South Korea, Overview
The South Korean power market underwent restructuring in 2001 and on April 27, 2001 the Korea
Electricity Commission (KOREC) was established under the Ministry of Commerce, Industry and Energy
(MOCIE), currently known as Ministry of Knowledge Economy (MKE). The main purpose for the
establishment of the commission was to ensure a smooth transition from a monopolistic market to a
competitive electricity market, and to ensure its efficient functioning. The main responsibility of KOREC is
to establish fair competition amongst power generators, to protect the rights and interests of electricity
consumers and to resolve disputes between companies and consumers. KOREC has the right to
establish legislative and organizational measures for the smooth functioning of the power market and to
create rules and regulations for electricity companies operating in the country. The bodies that assist
KOREC in carrying out its duties are:
The Electricity Market Surveillance Committee
The Rule-Amendment Committee
The Cost-Evaluation Committee
The Information-Disclosure Committee
The Dispute-Resolution Committee
Government investment has helped South Korea to successfully create green buildings and green
infrastructure, making the country an emerging leader in this segment. South Korea faces enormous
energy challenges as most of its energy requirements are imported. South Korea has progressed in
industrialization and urbanization, however, this has had a negative impact on the environmental and
natural resources such as water and forests, resulting in increased levels of carbon emissions.
In order to combat climate change, the government announced a low carbon, green growth strategy to
take precautionary measures. Many initiatives have been launched by the government to revitalize the
economy and provide more jobs, these include the 1 Million Green homes initiative that makes the use of
renewable energy mandatory in buildings.
The figure below summarizes the impact of various policies implemented in the country during the period
2001-2012. A FIT program implemented in 2001 which triggered the growth of renewable energy sources
(mainly wind and solar PV). There was a change in policy regime in 2012 when the country adopted a
RPS of 10% contribution from renewables in the overall energy mix by 2022. This change will mainly be
beneficial to the wind energy sector as the wind power had a low FIT which was not practical for the wind
power projects.
Renewable energy sources contribute to around 2% of the total power capacity in the country and had a
total installed capacity of 1.5 GW by the end of 2011. There is high potential for wind and solar PV in
South Korea and these two renewable sources are expected to drive the renewable market, helping the
country to meet its RPS mandate by 2022.

Page 106
Figure 26: Renewable Power Market, South Korea, Impact Analysis of Various Policies, 19922012
Feed in Tariff
The government fixed rates
for wind and solar PV for 15
years at 107.6KRW/kwh and
716.4KRW/kwh respectively.
For small hydro it was
73.7KRW/kwh for 5 years.
2002
2001
Years
National Energy Plan

2008-2030
A target of 10% total
energy consumption
from renewable power
by 2020-2022. To cover
20% of the global solar
manufacturing market
by 2030.
2nd Basic plan for NRE

Technology Development
The plan focuses on
renewable energy to
contribute 5% towards the
total energy power
consumption by 2012.
2005
2009
2003
Renewable Energy and

Energy Efficiency
Partnership (REEEP)
Formulated policies and
regulations for promoting
clean energy integration,
encouraging investment in the
power sector.
Renewable Portfolio
Standards
Renewable energy to
contribute 10% of the
total power generation
by 2022.
2008
2012
Green growth Policy

Plans an investment of
$97.6bn during 20092013 for the
development of low
carbon technologies.
Renewable Portfolio
Agreement (RPA)
Financial incentive of USD
1.260m has been invested
between Korea Electric
Power Corporation and six
power companies

Source: GlobalData
The figure below represents the relative impact of various policies for renewable energy technologies
including wind, solar PV, small hydropower and biopower.
Figure 27: Renewable Power Market, South Korea, Policy Impact on Applicable Renewable
Power Sources
Wind
Solar PV
Solar thermal
Small Hydro
Biopower
Feed-in Tariffs
N/A
N/A
Investments by Payments/Investments
or Tax Credits
N/A
National Targets
High
Medium
Low
Source: GlobalData

Page 107
7.2
Renewable Energy Regulatory Framework, South Korea, Major Policies
7.2.1
Green Growth Policy
South Korea has embarked on a low carbon, green growth policy. The presidential commission on green
growth was established in February 2009 and a law on green growth is under deliberation. The policy
aims to increase the focus on renewable energy sources in order to reduce its dependency on fossil fuels,
as well as to reduce GHG emissions.
The government announced a national strategy for green growth in 2009, through five-year plans over the
period 2009-2050. The first five-year plan spans from 2009 to 2013. The strategy focuses on 10 policy
directions, including renewable energy development, GHG reductions, a lower dependence on fossil
fuels, the promotion of green industries and adapting to climate changes. With an aim to be one of top
seven green nations by 2020 and top five by 2050, South Korea is looking to become a role-model for the
international community as a green growth leader. The objectives of the policy are as follows:
To attain 50% energy independence by 2020 and 100% by 2050, and to move away from a reliance
on fossil fuel imports.
It plans to develop green technology, increase strategic investments in the R&D of the green sector
and provide tax incentives for eco-friendly activities.
The policy aims to create an eco-friendly infrastructure by greening land and water, building a green
transportation infrastructure, and promoting public awareness of green lifestyles.
With the increase in the use of renewable energy sources, such as, solar, wind, tidal and biopower, as
well as the development of nuclear energy, the country is planning large investments into expanding
green energy. It plans to spend $97.6 billion during 2009-2013 on the green growth strategy.
7.2.2
Subsidy program (Renewable energy demonstration and deployment)
The subsidy program came into force in 1987 with the aim of providing grants and subsidies for the
promotion and deployment of new renewable energy sources. It forms basis for the development of new
technology designed to expand the market.
The government provides subsidies of 80% for a pilot program, 70% for an energy production facility and
50% for a heat generation facility.
7.2.3
Research Funding for the Development of Renewable Energy Sources
In an attempt to reduce South Koreas dependence on imported fossil fuels, the government has invested
in research funding for the development of renewable energy sources. This research funding was
introduced in 1988 for the development of renewable energy sources such as solar PV, solar thermal, fuel
cells and wind power. There has been investment of approximately KRW918 billion in research,
development and demonstration between 1988 and 2007.
7.2.4
The REEEP came in to force at the World Summit, August 2002. This public-private global partnership
structured regulatory framework and policies for renewable energy sources. The parties involved in the
partnership are businesses, development banks, national banks and NGOs. The partnership is funded by
number of governments such as Germany, Canada, Australia, Italy, Norway, the UK, and the European
Commission.
The international secretariat formulated new policies for reducing the risk involved in political, financial
and business support of renewable energy The main objective is to formulate policies and regulations for
promoting clean energy integration and encouraging investment in the power sector.
7.2.5
The Promotional Law of New and Renewable Energy Development, Use and
Dissemination
In 2002, South Korea amended the 1987 law of new and renewable energy development. In accordance
to this amendment, South Korea will introduce a center for new and renewable energy growth and
dissemination, and establish a certification system for new renewable energy systems.

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7.2.6
Second Basic Plan for New Renewable Energy Technology Development, Use
and Deployment
The target of this plan is to promote and deploy 11 new and renewable technologies with the overall goal
of enhancing the percentage contribution of renewable energy in the energy mix to 3% in 2006 and 5% in
2012.
This plan constitutes both an RD&D and market deployment techniques. The RD&D technique constitutes
two-tiered strategy of selection. Components with comparative benefits will be selected and government
assistance will be availed on the chosen technologies. Three technologies: wind, PV and fuel cells, have
been chosen from 11 competing technologies, all of which received support under the 1987 act.
The amount of KRW9.1 trillion is planned to be invested by the government budget for new and
renewable energy technology development and its deployment. Financial and tax support in the form of
incentives is as follows:
Loans are provided to companies at low rate of interest that uses renewable energy technologies,
techniques and equipment.
A 10% investment tax credit is provided to companies investing in energy RD&D projects.
Tax credits for companies reserving funds to invest in renewable energy RD&D.
Plans to strengthen fixed-price purchases of electricity from renewable energy.
Plans to offer grants for RD&D of renewable technologies up to 75% of capital cost for solar PV and
25% for wind power.
7.2.7
Certification for New and Renewable Energy Facilities
Certification for new and renewable energy facilities was introduced in 2004. Various stages were
included in the certification procedure:
First stage: performance evaluation of renewable energy support equipment
Second stage: performance evaluation report is received and a request is sent for certification from
the new and renewable energy center
Third stage: the new and renewable energy center issues a certificate
7.2.8
Tax Audit Exemption
The national tax service of South Korea decided that various businesses will be exempt from tax audits
including the companies involved in the development of alternative energy.
7.2.9
National Energy Plan 2008-2030
Long and medium term national energy policies were introduced in September 2008 for the period 20082030. The policy constitutes future energy policy direction such as a higher dependence on low carbon,
the adequate use of energy and environmental protection. Under this policy, the focus is made on the
deployment of renewable energy. The activities saving the energy and carbon market are facilitated by
the government under the plan. The targets set under this plan are as follows:
Renewable energy sources to contribute 10% of total energy consumption by 2020.
South Korea to emerge as a major renewable products manufacturer with a target of achieving a
20% share in the global solar manufacturing sector by 2030.
7.2.10 One Million Green Homes Program

The one million green homes program was initiated by the government in 2009 to increase the use of
renewable energy sources and reduce the dependence on conventional energy sources. The concept of
this subsidy program is to have renewable energy in residential areas where in the government will
support in funding for a share of the installation cost.

Page 109
The program hopes to have a million green homes using renewable energy systems, such as solar PV,
small wind, solar thermal, fuel cells, bioenergy and geothermal, by 2020. Under this program the
government provides 60% of the initial system cost for single family and private multi family houses. For
council owned housing, 100% system cost is provided by the government.
The program has been a success with around 65,000 households benefiting from this program and 68
MW of capacity being added by the end of 2010. Of 65,000 households, 26,360 has got benefitted from
the program in 2010 (installed capacity of 24 MW).
7.2.11 Feed-in Tariff Program

The FIT program came in to force in 2001 and provides power producers with a fixed price for renewable
power generated and connected to the grid. As per the law, renewable power generators bid in the South
Korean Power Exchange (KPX) and the government will compensate any shortfalls between the FIT and
pool price. In 2002, the government set an upper limit of support for renewables at 20 MW for solar and
250 MW for wind. FITs are granted on a first come first serve basis up to the set limit. The FIT was
modified in 2008 and the government provided standard rates for renewable installations. According to
the new amendment, project owners can choose between a tariff period of 15 or 20 years. From 2009
onwards a decremental rate was applied for solar PV, wind installations. A decremental rate of 4% was
applicable for solar and 2% for wind. Fuel cells attracted an annual decrement of 3% from 2010 onwards.
The government has fixed rates for wind and solar PV for 15 years, and for 5 years for small hydro and
biomass. FIT varies based on the technology used in renewable power generation.
7.2.11.1
FIT for Solar PV
The FITs for solar PV have reduced considerably and the following are some of the key elements of the
tariff program:
A cap of 500 MW for solar PV installations (earlier 100 MW)
Project owners can choose between a tariff period of 15 or 20 years
An annual decrement rate of 4%
A bonus of 10% is given to BIPV installations
Systems larger than 1 MW are considered as ground mounted systems.

Table 52:
Year
Solar PV Feed-in Tariff, South Korea, KRW/kWh, 2010-2011
Type
Ground
Mounted
2010
BIPV
Ground
Mounted
2011
BIPV
Term
System size
Less than
30KW
(KRW/kWh)
System size
Above 30KW
to 200KW
(KRW/kWh)
System size
Above 200KW
to 1 MW
(KRW/kWh)
System size
Above 1 MW
to Less 3 MW
(KRW/kWh)
System size
Above 3 MW
(KRW/kWh)
15
years
566.95
541.42
510.77
485.23
408.62
20
years
514.34
491.17
463.37
440.2
370.7
15
years
606.64
579.32
546.52
20
years
550.34
525.55
495.81
15
years
484.82
462.69
436.50
414.68
349.20
20
years
439.56
419.76
396.00
376.20
316.80
15
years
532.97
508.96
480.15
20
years
483.52
461.74
435.60
Source: Global Data, IEA-PVPS

Page 110
The FIT program was a success as over 300 PV systems were installed in 2009, an increase from 2002
when no PV systems were installed.
7.2.11.2
FIT for Wind Power
The following are the key elements of FIT for wind power:
A cap of 1,000 MW for wind installations
Project owners can choose between a tariff period of 15 or 20 years
An annual decrement rate of 2%

Table 53:
Feed-in Tariff for Wind, South Korea, KRW/kWh, 2009-2011
Year
FIT (KRW/kWh)
2009
107.73
2010
105.14
2011
100.98
Source: Global Data, KWEIA
7.2.11.3
FIT for Mini-hydro
The following are the tariffs for mini-hydro power in South Korea:
Table 54:
Feed-in Tariff for Mini-hydro, South Korea, KRW/kWh, 2010
Size
Fixed Tariff (KRW/kWh)
Variable Tariff (KRW/kWh)
Less than 1 MW
72.80-94.64
System Marginal Price (SMP) +10 to SMP+20
Above 1 MW
66.18-86.04
SMP+5 to SMP+15
From 2012 onwards, there is a change in the policy regime as the country had adopted RPS to promote
the development of the renewable energy market.

Page 111
7.2.12 Renewable Portfolio Standards

In 2012, the policy framework changed from a FIT scheme to RPS.
According to the RPS, renewable energy has to contribute 10% to the total energy demand. It is assumed
that the wind power will contribute a 70% share to the total renewable energy sources in South Korea.
Wind power, either onshore or offshore, is expected to contribute 15.6 GW by 2022. During the period
2012-2020, South Korea aims to reduce its GHG emissions by 5% as per the Kyoto Protocol Objectives.
Table 55:
Renewable Portfolio Standards, South Korea, Targets (%), 2012-2020
Year
RPS Target (%)
2012
2.0
2013
2.5
2014
3.0
2015
3.5
2016
4.0
2017
5.0
2018
6.0
2019
7.0
2020
8.0
2021
9.0
2022
10.0
7.2.13 Renewable Portfolio Agreement

Renewable Portfolio Agreement (RPA) is a new renewable energy investment agreement between the
government and energy suppliers, it was implemented in 2005. An agreement between Korea Electric
Power Corporation and six power companies lead to the investment of $1.26m for three years (2006,
2007 and 2008) and an additional investment of $430m in 2007 and $706.8m in 2008.
7.2.14 Mandatory Use for Public Buildings

The policy for the mandatory use of renewable energy in public buildings was implemented in 2011.
Buildings with an area more than 3,000 square meters need to use clean energy sources such as
bioenergy, geothermal energy, solar PV and solar thermal. Buildings with an area over 3,000 square
meters should also allocate 5% of its construction cost towards renewable energy. This policy also applies
to buildings which have been reconstructed or extended and 10% of the total energy consumption has to
be from the renewable sources, as of April 2011.
The consumption ratio will gradually increase to 20% in 2020 from 10% in 2011. Buildings with an area of
1,000 square meters or more will need to make use of renewable energy from 2012 onwards.
7.2.15 Methane to Markets Partnership

South Korea joined the methane to markets partnership in 2004. The partnership obliges the governments
of the signatory nations to work with the private sector with the aim of reducing global methane emissions
and increasing economic development and energy security. Other targets of the partnership including
enhancing mine safety, decreasing waste, and improving local air quality. The partnership initially focused
on three major methane sources: landfills, underground coal mines, and natural gas and oil systems. It is
anticipated that the efforts of this initiative will help to decrease the total annual methane emissions by 50
MtCO2 by 2015.

Page 112
Renewable Energy Policy Framework, Thailand
8.1
Renewable Energy Policy Framework, Thailand, Overview
The government of Thailand recognized the energy sector as a prime mover of economic growth. In order
to have sustainable economic growth, the country is paying more attention to the efficient use of energy
resources with due consideration towards environment friendly energy sources. The government of
Thailand has implemented various long term policy measures that favor renewable energy sources as a
means of achieving sustainable development. The main aims driving energy sector in Thailand are:
To establish sustainable energy security: The government is encouraging small-scale and very smallscale renewable power projects by providing various incentives to project developers/owners. The
government of Thailand had introduced an adder premium and other incentives to promote
renewable energy sources such as biomass, wind, solar and biofuels.
To expedite and promote renewable energy: The government of Thailand has elevated renewable
energy as a priority sector by encouraging production and use of alternative energy sources such as
biogas, biomass and biofuels. The government, in its Renewable Energy Development Plan (REDP)
2008-2022, is promoting alternative sources of energy to enhance energy security and reduce the
environmental impact. As part of the REDP, the government of Thailand is promoting community
level renewable projects and promoting R&D in various renewable energy sources.
To monitor energy prices and ensure appropriate levels to attract investments: The government of
Thailand is controlling energy prices by setting appropriate fuel price structure supporting the
development of energy crops that reflect true production costs.
To save energy and promote energy efficiency: The government of Thailand is promoting the efficient
use of energy by providing incentives for the use of energy saving appliances. The four major
initiatives such as the revolving fund for energy efficiency/renewable energy, ESCO venture capital
funds, tax incentives for energy savings and Demand Side Management (DSM) bidding are taken up
by the government of Thailand to increase and promote energy efficiency.
To support environmentally friendly energy sources: The government of Thailand supports Clean
Development Mechanism (CDM) projects to reduce the social and environmental impacts and to
reduce carbon emissions by promoting appropriate technology innovations. The government of
Thailand intends to reduce carbon emissions by one million tons per year.
8.2
Renewable Energy Policy Framework, Thailand, Major Policies
Thailands government is currently focusing on increasing electricity generation in order to meet internal
demand and to increase electrification. In order to keep up with the future demand for power and
generation capacity, the government has prepared a long term Power Development Plan (2007-2021).
The plan will be revised every year and has been revised twice to date. These plans include provisions for
diversification, power purchases, fuel diversification and installed capacity.
According to the RPS introduced by Thai government, it is mandatory for new power plants to have 4% of
their generating capacity from renewable energy. In order to sell power to the Electricity Generating
Authority of Thailand (EGAT), Independent Power-Producers (IPP) are required to generate 5% of their
total electricity from renewable energy. There is encouragement at the local community participation and
partnership in order to develop renewable energy power plants. In addition to these, there are various tax
credits, privileges and subsidies provided to renewable energy development. The following are some of
the major policies supporting renewables in Thailand.

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8.2.1
National Renewable Energies Development Plan 2008-2022
The renewable energy development plan is a 15 year policy framework promoting the use of renewable
energy sources in the overall energy consumption of Thailand. The target of the plan is to increase the
share of renewable energy sources to 20.3% of the final energy consumption in the country by 2022.
The following are the key objectives of the plan:
To increase the use of renewable energy and reduce the dependence on oil imports.
To enhance energy security in the country.
To promote the use of a green energy model in communities.
To support local manufacturing of renewable energy technology.
To promote R&D in renewable energy technology to improve performance.
The 15 year renewable energy development plan is divided into three phases: short term, medium term
and long term. The plan is expected will attract private sector investments with support from the
government in the form of various incentives. The national plan is designed to increase power generating
capacity and generation capacity. The dependent renewable energy policies and generating investments
will be supervised by the power capacities.
The national plan will be implemented on the basis of current financial support such as the ESCO venture
capital fund authenticated by the Department of Energy to support public and private renewable energy
projects through venture capital, equity investments, and technical support. The power development fund,
administrated by the Energy Regulation Commission (ERC) also is a channel for subsidies to consumers
and the growth of renewable energies in providing financial support to people affected by power plant
operations.
The Board of Investment (BOI), in accordance with the investment promotion strategy, has offered
incentives to investors such as import duty exemption on machinery, an eight-year corporate income tax
exemption with an additional 50% tax reduction for five years after the expiry of tax holiday. Renewable
energy is given priority in many of the tax incentive programs. The government also provides investment
grants for the design of biogas and solar water heating projects. The alternative energy targets set under
the plan for different technologies are detailed in the table below (IEA, 2010).
Renewable Energy Development Plan, Goal or Targets
The plan aims to achieve a 20.3% contribution from alternative energy sources in the total energy
consumption by 2022. The table below provides details of the targets by alternative energy source type
(overall and phase-wise) (DAEDE, 2010).
Table 56:
Renewable Energy Development Plan, Thailand, Interim Targets by Phase, 20082022
Energy Type
Potential
Year 2008-2011
Year 2012-2016
Year 2017-2022
MW
MW
Thousand ton
oil equivalent
(ktoe)
MW
ktoe
MW
ktoe
Solar
50,000
55
95
11
500
56
Wind
1,600
115
13
375
42
800
89
700
165
43
281
73
324
85
4,400
2,800
1,463
3,235
1,682
3,700
1,933
Biogas
190
60
27
90
40
120
54
MSW
400
78
35
130
58
160
72
3.5
Electricity
Hydropower
Biomass
Hydrogen
Total (Electricity)
Thermal (Heat) Energy
Solar Thermal
3,273
1,587
4,191
1,907
5,608
2,290
Ktoe
ktoe
ktoe
ktoe
154
18
38

Page 114
Biomass
Biogas
7,400
3,660
5,000
6,760
600
470
540
600
MSW
15
24
35
Total (Thermal)
4,150
5,582
7,433
Biofuels
Million liters
per day
(ml/day)
ml/day
ktoe
ml/day
ktoe
ml/day
ktoe
Ethanol
3.00
3.00
805
6.20
1,686
9.00
2,447
Biodiesel
4.20
3.00
950
3.64
1,145
4.50
1,415
Hydrogen
0.1
million
kg
124
Total
6.00
1,755
9.84
2,831
13.50
3,986
Total Energy Consumption

Total Energy from
Renewable Energy (RE)
RE Ratio
Natural Gas Vehicle (NGV)
(millions of standard cubic
feet per day (mmscfd) ktoe)
393
70,300
81,500
97,300
7,492
10,319
13,709
10.6%
12.7%
14.1%
3,469
596
5,260
690
6,090
Total Energy from

renewable energy and NGV
10,961
15,579
19,799
Alternative Energy Ratio
15.6%
19.1%
20.3%
Source: GlobalData, Department of Alternative Energy Development and Efficiency (DAEDE)
The following figure and table provide a snapshot of the interim and overall target.
Figure 28: Renewable Energy Development Plan, Thailand, Contribution of Alternative Energy
Sources to Total Consumption, ktoe, 2011-2022
20,000
21.0%
18,000
18.0%
16,000
12,000
ktoe
12.0%
10,000
9.0%
Growth Rate
15.0%
14,000
8,000
6,000
6.0%
4,000
3.0%
2,000
0
0.0%
2011
Total Energy from Alternative Sources
2016
2022
Contribution of Alternative Energy in Total Energy Consumption
Source: GlobalData, DAEDE

Page 115
Table 57:
Renewable Energy Development Plan, Thailand, Contribution of Renewable Energy

and Natural Gas Vehicles to Total Consumption, ktoe, 2011-2022
Year
Total Energy from Alternative Sources

(ktoe)
Share of Alternative Sources in Total Energy

Consumption (%)
2011
10,961
15.6
2016
15,579
19.1
2022
19,799
20.3
The overall target is 19,799 ktoe. Renewable energy sources will contribute 13,709 ktoe by 2022.
The figure and table below provides phase-wise targets and contribution by alternative source type
(renewable energy and Natural Gas Vehicles (NGV)).
Figure 29: Renewable Energy Development Plan, Thailand, Contribution of Renewable Energy
and Natural Gas Vehicles (NGV) to Total Consumption, ktoe, 2011-2022
20,000
18,000
16,000
14,000
ktoe
12,000
10,000
8,000
6,000
4,000
2,000
0
2011
2016
2022
Energy from Renewables
Natural Gas Vehicle
Table 58:
Renewable Energy Development Plan, Thailand, Contribution of Renewable Energy

and Natural Gas Vehicles (NGV) to Total Consumption, ktoe, 2011-2022
Year
Energy from Renewables (ktoe)
Natural Gas Vehicle (ktoe)
2011
7,492
3,469
2016
10,319
5,260
2022
13,709
6,090

Page 116
The figure and table below provides a further break-up of renewable energy sources and contribution by
source type.
Figure 30: Renewable Energy Development Plan, Thailand, Target for Renewable Energy by
Source Type, ktoe, 2011-2022
14,000
12,000
10,000
ktoe
8,000
6,000
4,000
2,000
0
2011
2016
Renewable Heat
2022
Biofuels
Renewable Power
Table 59:
Renewable Energy Development Plan, Thailand, Target for Renewable Energy by

Year
Renewable Heat (ktoe)
Biofuels (ktoe)
Renewable Power (ktoe)
2011
4,150
1,755
1,587
2016
5,582
2,831
1,907
2022
7,433
3,986
2,290

Page 117
The figure and table below provide the details of the renewable heat targets by source type.
Figure 31: Renewable Energy Development Plan, Thailand, Target for Renewable Heat by
7,500
6,750
6,000
5,250
ktoe
4,500
3,750
3,000
2,250
1,500
750
0
2011
Biomass
2016
Biogas
2022
Solar Thermal
MSW
Table 60:
Renewable Energy Development Plan, Thailand, Target for Renewable Heat by

Year
Biomass
Biogas
Solar Thermal
MSW
2011
3,660
470
15
2016
5,000
540
18
24
2022
6,760
600
38
35

Page 118
The figure and table below provide details of the renewable power targets by source type.
Figure 32: Renewable Energy Development Plan, Thailand, Target for Renewable Power by
Source Type, MW, 2011-2022
6,000
5,400
4,800
4,200
MW
3,600
3,000
2,400
1,800
1,200
600
0
2011
Biomass
2016
Wind
Solar
2022
Hydropower
MSW
Biogas
Hydrogen
Table 61:
Renewable Energy Development Plan, Thailand, Target for Renewable Power by

Source Type, MW, 2011-2022
Year
Biomass
Wind
Solar
Hydropower
MSW
Biogas
Hydrogen
2011
2,800
115
55
165
78
60
2016
3,235
375
95
281
130
90
2022
3,700
800
500
324
160
120
3.5

Page 119
The figure and table below provide the biofuels targets split by fuel type.
Figure 33: Renewable Energy Development Plan, Thailand, Target for Biofuels, ml / day, 20112022
14
12
10
ml / day
0
2011
2016
Ethanol
2022
Biodiesel
Table 62:
Renewable Energy Development Plan, Thailand, Target for Biofuels, ml/day, 20112022
Year
Ethanol (ml / day)
biodiesel (ml / day)
2011
3.00
3.00
2016
6.20
3.64
2022
9.00
4.50

Page 120
The figure and table below provides contribution by alternative energy source type (in %) in the overall
REDP target by 2022.
Figure 34: Renewable Energy Development Plan, Thailand, Contribution by Alternative Sources
to the Total Target, %, 2022
21%
20.3%
Contribution by Various Sources
18%
15%
6.20%
12%
4.10%
9%
6%
3%
7.60%
2.40%
0%
Renewable Power
Renewable Heat
Biofuels
NGV
Total Target
Table 63:
Renewable Energy Development Plan, Thailand, Contribution by Alternative Sources

to the Total Target, %, 2022
Year
Target
Renewable Power
2.40%
Renewable Heat
7.60%
Biofuels
4.10%
NGV
6.20%
Total REDP Target
20.3%

Page 121
8.2.1.1
Short Term (2008-2011)
The short term plan focuses on developing the renewable energy technologies that have already been
accepted (proven technologies). Full financial support will be provided for the development of high
potential renewable energy sources including biofuels. Electricity and heat production from biomass and
biogas using NGVs measures will be encouraged.
The measures underlined in the policy for the first phase of development are:
Determine the appropriate incentive measures
Promote public participation in the promotion of renewable energy
Adder cost review and define measures for the environment
Support measures, tax incentives for investment and entrepreneurship
Promotion of investment and risk insurance through the ESCO fund
Pushing renewable energy projects towards the CDM
Revise laws/regulations in related sectors for investment in renewables
Promote industries in renewable energy technologies to reduce costs
Renewable energy technology standards
Transfer technical knowledge and examples of renewable energy projects experience
8.2.1.2
Medium Term (2012-2016)
The second phase entails the promotion of R&D in the renewable energy industry and the development
and support of new renewable energy technologies, such as the production of ethanol and biodiesel from
algae; oil production from biomass; the use of hydrogen fuel and so on. This phase will provide for the
development of the economic viability of the use of new technologies for the production of biofuels. The
plan proposes the development of a green city in order to create community level renewable energy
production.
The main tasks under the plan are:
Budgeting and integrating all the sectors related to research. Promoting research such as plant
productivity and energy efficiency technology research to enhance the use of renewables in the
country.
Learning ways to manage renewable energy at macro level and develop it into commercial value in
order to provide concrete results.
Create awareness of renewable energy amongst the general public.
8.2.1.3
Long Term (2017-2022)
The third phase comprises the further growth of new renewable energy technologies with economic value
including the expansion of the green city and community power. The phase aims to:
Create awareness and knowledge among the public
Establish Thailand as a biofuel exporting center in the ASEAN region.
Make communities aware of the importance and relevance of participation in the development of
renewable through measures such as the establishment of energy volunteers in all villages, and a
mobile energy technology demonstration the unit.
Ensure policy measures promoting renewable energy in all sectors are easily accessible.
Establish a mechanism through the Renewable Energy Network to exchange knowledge in networks
such as wind power, biomass and biogas.
Organize workshops and training seminars are conducted for personnel in the areas of renewable
energy.

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The table below details the promotional measures to be taken under the development plan in the different
sectors in Thailand.
Table 64:
Area
Electricity
Thermal
Renewable Energy Development Plan, Thailand, Promotion Measures by Phase,

2008-2022
Phase 1: 20082011
Phase 2: 20122016
Phase 3: 20172022
Sustain the measures of RPS, BOI and

Revolving Fund
RPS. BOI and Revolving

Fund measures
RPS. BOI and Revolving

Fund measures
Demonstrate the integrated local

power generation
Promote the integrated local

power plants
Reduce the production cost

of alternative energy
Promote the co-generation system

adjust the Adder properly to
technology
Promote the prototype of

Green City
extend the result of Green

City
Extend the purchasing time of

SPP/VSPP generated from renewable
energy by giving the Adder
Promote the new

technologies for ex: BIGCC
Support the alternative

energy technology industry
measures of BOI,ESCO Fund and a

financial support for installation costs
measures of BOI, Revolving

Fund and ESCO Fund
measures of BOI, Revolving

Fund and ESCO Fund
Establish the standard requirements

on high efficiency of energy producing
equipment/appliances
Promote the planting of fast

-growing plants
Support the planting of fastgrowing plants
R&D on co-producing the biogas from

effluents and biomass (Biomass to
Biogas)
Promote the co-production

of biogas from effluents and
biomass (Biomass to
Biogas)
Promote Biomass to Biogas
Revise the regulations to facilitate an

investment on producing the energy
from MSW
Promote the Green City,

Building Code (Solar) and
energy produced from RDF
Extend the result of Green

City
Extend the loan ranging for the low

interest revolving fund
Promote the industry of

domestic production for
equipment /appliances
Promote the Building Code

(Solar)
Promote the RDF energy
Production
Promote the industry of
technology production and
equipment producing
alternative energy in the
country
Biofuels
Research on the 2nd Generation

Technology for ex: biodiesel/ ethanol
produced from seaweed, Jatropha
cellulose, BHD, BTL
Promote the 2nd Generation

Technology for biofuel
production, for ex: BTL,
Hydrogenation (BHD)
Promote the 2nd Generation

Technology for biofuel
production, for ex: BTL,
Hydrogenation (BHD)
Extend the planting area of oil palm to

increase the agro-products of energy
crops
Develop the other energy

crops to be economical
cost-effective
Increase the product yielding

per ray of energy crop (
plants grown for energy
purposes)
Do the hydrogen research
Demonstrate the hydrogen

production and consumption
Promote and extend the

results of hydrogen uses
Speed up the extension of the

E20/E85 petrol stations
Make a confidence in using

biofuel at more than 5%
proportion
Promote the producing of

ethanol from cellulose
Accelerate the development of auto

industry for E85
Promote the Green City
Promote the downstream

industry
Promote to build up the value added of

by-products from biofuel industry
Develop the biofuel hub /

exporting center
Impose the tax measures
measures of BOI, Revolving Fund


Page 123
The REPD is supported by six mechanisms from the Ministry of Energy (MoE) for the promotion of
renewable energy sources:
Tax incentives through the BOI
Technical assistance to renewable projects by providing resource potential data
Investment grants
Soft loans
ESCO venture capital fund
Adder feed-in premiums
8.2.2
Tax Incentives through Board of Investment
The program provides for import duty waiver and co-operate tax exemption on new investment in:
Energy conservation business
High efficiency machine or equipment and renewable energy equipment manufacturing
Solar PV manufacturing
ESCO
Renewable energy production business
Alcohol or fuels from agricultural products
Electricity or steam generation (ADB workshop, 2009)
According to the program regulations, units manufacturing solar cells, energy saving machinery,
renewable energy equipment and machinery get a corporate income tax exemption for a period of eight
years. The government also provides a tax exemption of eight years for energy generated from alternative
sources and to energy service consulting firms who provide consulting services on the use or installation
of energy-saving machinery and equipment.
The key elements of the program are:
Import duty waiver on equipment imports for renewable energy
Corporate tax holiday for eight years
Additional privileges such as:
50% reduction in income tax for corporations on net profit for five years post expiry of tax
holiday
Deduction from net profit for installation and construction not exceeding 25% of total
capital investment in addition to the depreciation deduction
8.2.3
Technical Assistance for Renewable Energy Projects
The MOE provides various research data pertaining to renewable energy potential in Thailand which is
available for public use, including:
Biomass energy potential database
Wind energy potential database
Micro-sitting information
Solar energy potential database
Equipment supplier database

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8.2.4
Investment Grants
Investors can get an investment grant for system/project design, technical consultant and partial
investment for biogas, Municipal Solid Waste (MSW) and solar hot water.
30% for biogas
25%-100% for MSW
30% for solar hot water
Subject to a maximum allocation of THB50m per project
8.2.5
Soft Loans - Revolving Fund
The revolving fund offers loans at a lower interest rate for enhancing energy efficiency and renewable
energy projects. The budget for the soft loan was granted from the ENCON fund with an initial of
THB7,000m ($50m). The approval and loan process is done by banks while DEDE provides technical
support in project assessment. The maximum loan size is $1.2m per facility while banks can collect a
maximum interest rate of 4% from the loan. The loan is to be repaid to the ENCON fund through DAEDE
within seven years (ADB Workshop, 2009).
The main objectives of the revolving fund are:
Encourage commercial investment in energy efficiency projects.
Familiarize banks on lending loans for the development of renewable energy development.
8.2.6
Energy Service Company Fund
The main objective of the ESCO is to encourage investment in energy conservation and to develop the
renewable energy market through project financing mechanisms. The project financing mechanisms
include equity investment, venture capital, equipment leasing, creation of carbon credit market, and credit
guarantee facility. The Energy Conservation Promotion Fund (ENCON) has been launched to encourage
the renewable energy projects with an investment scheme of about THB1,000m. By March 2011, the
program stimulated an investment of over THB4,500m per year.
8.2.7
Adder Feed-in Premiums
The program provides additional adder feed in premiums to the regular tariffs. This is by far the most
effective financial support program for the development of renewable energy. The adder cost varies
based on the type of renewable energy technology and size of the production capacity.

Page 125
The table below details the adder rate for the various renewable energy technologies.
Table 65:
Adder Feed-in Premiums, Thailand, Premium for Renewable Energy Technologies,

THB/kWh, 2011
Technology
Biomass
Adder for
VSPP
(THB/kWh)
Adder for
SPP
(THB/kWh)
Special
Adder*
(THB/kWh)
Supporting
Period in
Years
Up to 1 MW
0.50
Bidding
1.00
More than 1 MW
0.30
Bidding
1.00
Up to 1 MW
0.50
Bidding
1.00
More than 1 MW
0.30
Bidding
1.00
Anaerobic
Digestion (AD)
and Land fill Gas
(LFG)
2.50
2.50
1.00
Thermal Process
3.50
3.50
1.00
Up to 50 kW
4.50
3.50
1.50
10
More than 50 kW
3.50
1.50
10
50 200 kW
0.80
1.00
Less than 50 kW
1.50
1.00
8.00
8.00
1.50
10
Biogas
Waste (community
waste, non hazardous
industrial waste and
inorganic waste)
Capacity
Wind
Mini and Micro Hydro

Solar
Note: * Special Adders for Facilities in 3 Southern Provinces and Diesel-Gen. replacement on PEA system
Source: GlobalData, Department of Alternative Energy Development and Efficiency, Ministry of Energy
In 2010, the National Energy Policy Council (NEPC) amended the adder policy for solar energy projects.
Due to over-subscription, the adder rate for solar projects was reduced from 8 THB/kWh to 6.5 THB/kWh
for a period of 10 years. The tariffs are temporarily suspended for new applications for solar energy.
8.2.8
Energy Conservation Program
Under the ENCON, introduced in 1992, the energy conservation promotion fund was established to
financially support new and renewable energy technologies in its growth and development. The amount
for the fund was secured by the existing oil fund.
ENCON was established to grant funds for energy conservation development through enhanced
awareness, energy efficient technologies and development of renewable energy sources.
ENCON has different programs focusing on various groups and sectors. Under the voluntary program, the
ENCON fund provides financial support for the development of the use of renewable energy sources
through three sub-programs: renewable energy and rural industry, industry liaison, and R&D.
The renewable energy and rural industry sub-program focuses on opportunities to promote fuel
substitution and introduce renewable energy technology. The program provides project owners with
grants to cover the complete operational cost and financial assistance in the form of interest subsidies.
The industrial liaison sub-program offers financial support to energy demonstration projects. The program
includes proven technologies and the application of the results from research projects. It focuses on
applications for providing technology to small industries. The aim of the program is to increase the
capacity of the industrial sector to generate energy-efficient and renewable energy equipment in Thailand
by providing technical and financial assistance to introduce a new energy market. The services
considered under the program are as follows:
Financial support for market growth of energy-efficient or renewable energy equipment in Thailand.
Market research and the formulation of a marketing plan
PR activities for energy-efficient material or equipment
Support for the producer/distributor in reducing prices to the consumer

Page 126
Support to the users of energy-efficient equipment
Execution of activities within the scope of an equipment labeling program
8.2.9
Small Power Producer and Very Small Power Producers Program
Thailands Small Power Producer (SPP) program was introduced in 1992 in order to increase
cogeneration and renewable power. Very Small Power Producers (VSPP) are private power producers
that have helped the development of renewable energy by partnering with two distribution utility
companies: the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA).
The electricity system constitutes Electricity Generating Authority of Thailand (EGAT) being the single
purchaser of electricity. EGAT supplies bulk power to the Metropolitan Electricity Authority (MEA) and is
accountable for the renewable power supply to consumers in Bangkok and the surrounding areas. The
Provincial Electricity Authority (PEA) is accountable for the sale of electricity in the different parts of the
country. According to the power purchase agreement, electricity must be sold to electric utility companies
by the private power generators.
Private investments were made in order to increase the renewable power production. Under the program,
every facility was allowed to offer extra power to EGAT at a price set from EGATs avoided cost. In
starting the size of the facility was kept small by restricting the sale to the grid from each facility to 60 MW.
This later increased to 90 MW.
Even though the government encouraged renewable energy projects, only the use of bagasse, rice husk
and woodchips grew, while all other types of renewable energy showed no growth mainly due to high cost
of purchase and connection, and the technical risks.
The VSPP program was introduced due to existing SPP regulations of EGAT that are not formulated for
power producers with a capacity lower than 1 MW. Therefore on September 4, 2006, the National Energy
Policy Council (NEPC) allowed the capacity bought from VSPPs to increase to between 1 MW to 10
MW. Also, the technical interconnection constraints were amended to support the purchase of power from
VSPPs.
In order to encourage more investors to generate renewable power, the Ministry of Energy aimed to buy
530 MW of power from SPPs using renewable energy. In 2007, several amendments were made to the
SPP and VSPP regulations. The amended policies were more investor friendly, transparent and practical.
The amended regulations created a financial incentive (adder) in addition to the normal tariffs in order to
encourage the development of SPPs and VSPPs. The amount of adder varies depending on the type of
technology being used. According to the amended policy, small scale energy producers were paid higher
tariffs for feeding electricity into the grid during peak consumption times (IEA, 2010).

Page 127
8.2.10 Strategic Plan for Renewable Energy Development

In 2003, the Sustainable Alternative Energy Development Strategy was passed by the Thai cabinet and
set a target of increasing the total renewable power generation from 0.5% in 2002 to 8% by 2011. The
plan is expected to deliver an energy equivalent of 5,068 ktoe per year. The renewable energy facilities
included under the plan are solar power, wind, biomass, biogas, hydropower, biofuels, geothermal, fuel
cells and energy efficiency.
The key elements of the plan are:
Energy conservation
Renewable energy use
Human resources development
Public awareness
The key objectives of the plan are:
To regulate 4% energy from renewable sources such as solar, wind and biomass
To establish incentive measures to enhance the purchase of electricity produced by

renewable energy, for example, the Energy Conservation Promotion Fund that will grant
tax credits and other financial incentives.
To support R&D on high potential renewable energy, such as solar, wind and biomass.
To encourage and enhance community partnerships in renewable power plants.
To enforce minimum performance standards for electrical appliances and promote cogeneration systems in industries.
8.2.11 Tax Incentive for Energy Conservation

8.2.11.1
Cost Based Tax Incentive
Provides a 25% tax break for investments in energy efficiency projects. This incentive is applicable for the
first THB50m investment and is spread over five years.
8.2.11.2
Performance Based Tax Incentive
100% of the achieved energy saving will be tax deduction. A maximum incentive of THB2m per facility is
available. Pre and post audit will be required.

Page 128
Renewable Energy Policy Framework, New Zealand
9.1
Renewable Energy Policy Framework, New Zealand, Overview
A rapid growth has been observed in New Zealands renewable electricity generation sector due to
several incentive programs and subsidies by the government in the form of tax relief, capital cost grants
and favorable electricity rates for renewable power. According to these incentive programs and the
funding mechanisms, the government of New Zealand not only provides a premium for the production of
renewable energy, but it also ensures priority dispatches for electricity from renewable sources and quota
obligations.
New Zealand meets most of its energy needs by harnessing power from renewable sources. This is in
contrast to other developed countries which are heavily dependent on fossil fuels. The first government
support for renewable energy came in the form of the Energy Efficiency and Conservation Act of 2000
which included support to almost all renewable sources. As a part of the Energy Strategy 2050, the
government of New Zealand has set a target of 90% renewable electricity by 2025. The country already
uses approximately 70% renewable electricity, primarily hydro and geothermal power.
9.2
Renewable Energy Policy Framework, New Zealand, Major Policies
The government of New Zealand has introduced an Emissions Trading Scheme (ETS) which provides
wide scale incentives to investments that promote renewable energy. Under the ETS, the government is
transferring all fuel costs to consumers and power generation in an attempt to reduce its dependency on
the use of thermal power. In addition, through the 2010 Electricity Industry Act, the government seeks to
improve competition, ensure a reliable and efficient supply of electricity and improve operational
efficiency; the government created the Electricity Authority for the same purposes. In the same year, the
New Zealand government introduced a 10 year ban on the construction of new gas or coal-fired
generators and power plants, with the exception of power plants at industrial sites, to help the country to
meet its emission target. Active investment and a review of carbon-storage technology for power plants
are also ongoing.
New Zealand has a Kyoto protocol commitment to not exceed the 1990 level of carbon emissions during
20082012. The emission limits in the country follow the European standards with a few years delay.
Currently, New Zealand has implemented the Euro V limit (European emission standard).
The government has set a target of 90% of electricity to be generated from renewable sources by 2025. In
addition, the government plans to continue a CCS, technical, regulatory and policy work program in order
to facilitate implementation and coordinate engagement in international partnerships.
However, New Zealand is yet to develop a strong policy, such as FITs, to increase renewable
development. Programs such as FITs help promote investment in the renewable energy market. Some of
the important programs promoting renewable energy and regulatory problems that hinder the growth of
wind power in New Zealand are discussed below.
9.2.1
New Zealand Energy Efficiency and Conservation Strategy (NZEECS)
The New Zealand Energy Strategy (NZES) was introduced on 11 October 2007. The aim of the
government was to maintain feasible, low emissions energy system and explain the steps that will be
taken to make this aim a reality.
The government is revised the NZES and its related document, the New Zealand Energy Efficiency and
Conservation Strategy (NZEECS). The revised draft strategies were announced in July 2010 and assist
the government's aim of enhancing the economic growth. The publics comments were considered on
both draft strategies and the government is anticipated to make the final new strategies.
The NZES addresses three main energy challenges: the requirement to cut greenhouse gases, to
respond to climate change and to provide clean, secure, economical energy while accounting with the
environment.

Page 129
The present NZES attempts to:
Give clear direction on the upcoming of New Zealand's energy system
Focus on markets and regulation to safely provide energy services at economical prices
Decrease GHG emissions
Increase
the
Measures include:
contribution
of
economical
energy
efficiency
and
storage.
Regulations promoting renewable energy sources and producing 90% of electricity from
renewable energy sources
financing for wave and tidal power generation
Need for energy companies to publicly present their emission levels
autonomous sector agreements to cut emissions
The NZES includes the NZEECS, the New Zealand Transport Strategy (NZTS) and a regulation for a New
Zealand Emissions Trading Scheme. If the schemes are successful in accomplishing their targets New
Zealand will boast the following achievements:
Carbon neutral in the electricity sector by 2025
Carbon neutral in the stationary energy sector by 2030
Carbon neutral in the transport sector by 2040
Carbon neutral in the total energy sector by 2040
9.2.2
The Energy Efficiency and Conservation Strategy, 2007
The NZEECS was introduced according to section 10(2) of the Energy Efficiency and Conservation Act
(2000). The strategy substitutes the National Energy Efficiency and Conservation Strategy (2001).
The NZEECS is an action plan to:
Develop sustainability in New Zealand
Drive economic transformation in business
The strategy programs are auxiliary to the Emissions Trading Scheme. The NZEECS targets actions in
the following areas:
Energy wise homes
Energy wise business
Energy wise transport
New Zealand's efficient and renewable electricity system
Government leading the way
The programs are anticipated to provide the following savings:
Stationary energy (electricity plus industrial processes and heat): 30 Petajoules (PJ) of energy, 9.5
PJ of extra renewable energy for industrial purposes per year plus five to six million tons of emissions
savings per year by 2025
Transport: Cumulative savings of 4.8 billion liters of fuel, 175 PJ of energy and 11.8 million tons of
emissions by 2025.
The major proposals of the strategy in different target areas for the development of renewable energy in
the country are:

Page 130
9.2.2.1
Energy Wise Business
The program aims to promote more energy efficient and competitive businesses using more renewable
energy and emitting less CO2. The program provides for:
Up to an additional 9.5 PJ per year of energy from woody biomass or direct-use geothermal by 2025.
Specific programs to do business with the tourism sector to enhance the energy efficiency and
renewable energy to make it more competitive.
Table 66:
Energy Wise Business, New Zealand, Summary of Actions
Action
Outcome
Delivery
Industrial energy efficiency and renewable energy

Industrial energy efficiency
Direct assistance
Capital grants for Energy Intensive
Capital grants for Energy Intensive Businesses (EIB)

Expanded the program
0.14 PJ
2,000 tones CO2 pa in 2025
3.5 PJ
0.06 Mt CO2 pa in 2025
EECA
(Funded)
EECA
(Under
consideration
from 2008)
Improve program energy audits and improvement implementation

Expanded the program
0.3 PJ
5,000 tones CO2 pa in 2025
4.1 PJ
0.07 Mt CO2 pa in 2025
EECA
(Funded)
EECA
(Under
consideration
from 2008)
Source: GlobalData, eeca.gov
Table 67: Energy Wise Business, New Zealand, Renewable Energy Program
Action
Outcome
Delivery
Support for BANZ and NZGA
Ongoing support
EECA
(Funded)
Capital grants, information and demonstration projects for increasing the

supply of woody biomass
Grants available through

FIDA and
EIB
EECA
(Funded

Page 131
9.2.2.2
Energy wise transport
The targets set for the transport sector are:
Per capita transport emissions halved by 2040
Average fuel economy to be increased by around 25% by 2015
80% of vehicles will be able to use 10% biofuel blends or to be electric powered by 2015.
Table 68:
Energy Wise Transport, New Zealand, Developing and Adopting Renewable Fuels
Action
Delivery
Develop voluntary sustainability consumer information

for biofuels.
EECA
(Funded)
Establish an advisory group to look at future vehicle

technologies, such as biofuel and electric vehicles, and
barriers to their early adoption.
MoT
(Funded)
Introduce the biofuel sales obligation and review the

post-2012 obligation levels in 2010.
MED
(Funded)
Funding support for new low carbon energy R&D.
MORST/FRST
(Funded)
Accelerate the uptake of plug-in hybrid and electric

vehicles.
MoT
(Funded)
9.2.2.3
New Zealand's efficient and renewable electricity system
90% of electricity produced from renewable sources by 2025
Steps undertaken to enhance investment in renewables and energy efficiency by energy companies
Table 69:
Energy Efficient and Renewable Electricity System, New Zealand, Promoting the
Uptake of Renewable Electricity
Action
Delivery
National Policy Statement (NPS) for renewable energy
MfE
(Funded)
Provide information to local government to assist with

planning processes for renewable energy
MfE / EECA
(Funded)
Provide guidance to councils around consenting small scale

renewable energy systems
EECA
(Funded)
Identify changes to market arrangements to manage

higher levels of wind generation in the future
EC
(Funded)
Relax some conditions around investment in renewable

generation by lines companies
MED
(Funded)
Source: GlobalData, eeca govt
9.2.2.4
Government leading the way
Six core public sector agencies to be carbon neutral by 2012
25% cut in CO2 emissions per vehicle from the public service departments fleet by 2012

Page 132
9.2.3
Electricity Industry Act 2010
The Electricity Industry Act is the response to an electricity market review that began in 2009. The Act
enhances the competition in the energy sector, especially in retailing and in the South Island. It offers high
incentives to the industry in order to manage the power supply. It focused on the governance and
decision-making concepts for the industry.
The act also promotes different measures to increase the incentives for the industry. The act reviews
governance arrangements in the electricity segment by substituting the electricity commission with a more
concentrated and independent electricity authority. The new authority aims to improve competition,
consistency and effectiveness in the industry.
Finally, the act promotes provisions to ensure that rural electricity consumers will continue to receive a
secure electricity supply.
9.2.4
New Zealand, Emissions Trading Scheme
In September 2007, the New Zealand government announced the introduction of an emissions trading
scheme in order to reduce GHG emissions and achieving rational goals in New Zealand.
It is anticipated that over time, the scheme will be inclusive of all main sectors: forestry, transport,
stationary energy, industrial processes and all greenhouse gases.
The characteristics of the amended act are:
Reviewed entry dates of July 1, 2010 for transport, energy and business sectors and January 1, 2015
for agriculture
An erratic phase until January 1, 2013 with a 50% obligation and NZD25 fixed price option for the
transport, energy and business sectors
A production-based industry average concept to allot for trade exposed, emissions-exhaustive

businesses
A phase-out of industry support aligned with trading partners and the government's long-term target
of reducing emissions by 50% by 2050
9.2.5
New Zealand, Climate Change and Sustainability Agenda
New Zealand aims to become carbon neutral and has adopted the following targets in order to meet this
goal:
A net rise in forest area of 250,000 hectares from 2007 levels, by 2020
90% of the electricity to be produced from renewables by 2025
By 2040 per capita transport GHG emissions to be decreased to half of those in 2007
Remain a global leader in agricultural emissions reduction research, and in the early adoption and
application of new techniques and steps that decreases agricultural GHG emissions
9.2.6
Warm Up New Zealand Heat Smart
The government of New Zealand is committed to increasing the use of clean energy sources in the
residential sector. The government expects to have more than 180,000 homes installed with clean heating
devices by 2015. The government has allocated NZD323m over a period of 4 years for the Warm up New
Zealand Heat Smart Program.
The government will provide incentives to the home owners and offer a reduction of 33% towards the
installation cost of the devices. People with a low level of income are eligible for a higher level of funding.
This program will help conserve energy and balance the supply and demand of energy efficiency
upgrades.

Page 133
9.2.7
Solar and Heat Pump Water Heating
This program has been initiated to reduce the cost of water heating in the households and industries of
New Zealand. The New Zealand government announced the launch this grants scheme in May 2007.
Financial help is provided for the households interested in this program. EECA helps consumers in
deciding which kind of solar water heating system they can opt for.
A website has been created to help homeowners estimate how much energy can be saved with different
heating systems. The grants provide for NZD1000 for domestic solar water heating installation.
9.2.8
Efficient Lighting Strategy
The New Zealand government is determined to reduce the lighting energy consumption by 20% by 2015.
For this purpose the government has extended its support to use efficient and affordable lighting
technologies.
9.2.9
Energy Saving Scheme: Solar Heaters Support
To increase the cost effective systems in the residential sector the government has initiated an Energy
Saver Fund program administered by the Energy Efficiency and Conservation Authority (EECA). Funding
is given to projects which are being implemented in the residential sector and for solar water heaters.
9.2.10 Renewable Energy and Energy Efficiency Partnership

The REEEP was introduced in August 2002. It is a global public-private agreement that formulates the
policy and regulatory initiatives for green energy, and facilitates by providing funds for renewable energy
projects.
REEEP
is supported
by
national
governments,
industry
and
development
banks.
The partnership is financed by the governments of many countries such as: Australia, Austria, Canada,
Germany, Ireland, Italy, Spain, the Netherlands, New Zealand, Norway, the UK, the US and the European
Commission. REEEP's regional secretariat formulates the policy and provides funds to develop renewable
energy and energy efficiency. Its international secretariat uses political and financial assistance to
decrease the risk involved in the application of new policy and financing initiatives.
The partnership increased the investment opportunities, supported business and institutional models,
linked to carbon finance and developed successful financing mechanisms. It aims to assure that policies
and regulatory framework enhance the use of clean energy, develop the efficient use of power and
increases investments in the sector. REEEP executes regular program funding cycles, targeting projects
which can be repeated and have an effect on the growth of the renewable market and efficient energy and
innovation.
9.2.11 Proposed National Policy Statement for Renewable Electricity Generation

The aim of the proposed national policy statement for renewable electricity generation is to develop and
evaluate the operation of new renewable power production activities so that 90% of New Zealands
electricity will be produced from renewable sources by 2025; and to provide assistance to power
produced at small and community-scale in the country.
The policy also aims to increase awareness of the importance of renewable electricity production in order
to decrease GHG emissions and to identify the type and area of power production in New Zealand. The
policy accounts for a relative degree of the unfavorable environmental effects linked with electricity
production techniques to be reversible. It also conducts research activities to evaluate and identify
potential sites and energy sources for renewable electricity production in the country.

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9.3
Financial Incentives and Policy Support for Solar Power, New Zealand
New Zealand is in an excellent position for solar energy investments due to strong governmental support,
the availability of highly qualified workforce, and numerous scientific research centers and universities. All
these factors, along with the appropriate policies, have guaranteed a rapid and smooth implementation
and development of solar PV projects in New Zealand.
Financial incentives and supporting policies enhance the uptake of efficient solar power in generating
electricity by offering information to customers regarding quality and cost effectiveness in the industry and
providing grants for generating electricity from solar energy.
The New Zealand Grant for public building schemes is a key part of the governments response to meet
its target of producing electricity by solar energy. It is a detailed action plan for increasing the uptake of
solar energy efficiency and solar energy programs.
9.3.1
Grants for Public Buildings
The New Zealand government requires public sector organizations to play an important role in increasing
the use of renewable energy, cutting GHG emissions and enhancing energy efficiency.
The government assists the public sector organizations to promote and install solar water heating
systems in buildings.
Public sector organizations including government agencies, district authorities, and educational
institutions are allowed to apply for a feasibility study grant, an installation grant, or both.
9.3.1.1
Installation Grant
The aim of this grant is to decrease the set up costs of solar water heating system. The value of the
installation grant is determined on the basis of type of solar water heating system application and is
categorized a follows:
Standard residential system (up to 7m2 of collector area): Up to 25% of the cost of an installed
standard residential system is covered by the grant, up to a maximum of NZD1,000 per standard
residential system.
Commercial system (above 7m2 of collector area): For a customized solar water heating system
application EECA offers funding up to NZD500 per square meter of collector area installed to no
more than 50% of the installed solar water heating cost, to a maximum value of NZD50,000.
9.4
Financial Incentives and Policy Support for Wind, New Zealand
New Zealand has 11 operating wind farms. These wind farms have a combined installed capacity of 497.3
MW, accounting for approximately 4% of the countrys annual electricity generation. The share of wind
energy in overall electricity generation has increased over recent years. However, growth has slow paced.
In spite of the high potential, the lack of clear regulations has slowed the growth of wind power in New
Zealand. The absence of clear regulations, particularly for wind power developments, affects the small
scale wind power companies.

Page 135
The figure and table below detail the growth in wind power generation in New Zealand.
Figure 35: Wind Power Market, Power Generation and Share in Total Power Generation Mix,
New Zealand, GWh, 2007-2011
450
5.0%
400
4.5%
3.5%
300
3.0%
GWh
250
2.5%
200
2.0%
150
1.5%
100
Share in Total Power Generation
4.0%
350
1.0%
50
0.5%
0.0%
Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar07
07
07
07
08
08
08
08
08
09
09
09
10
10
10
10
11
Wind Power
% Share in Total Power Generation
Source: GlobalData, New Zealand Wind Ministry of Economic Development
Table 70:
Wind Power Market, Power Generation and Share in Total Power Generation Mix, New
Zealand , GWh, 2007-2011
Quarter Ending
Generation (GWh)
Percentage of Total Generation
Mar-07
146
1.5%
Jun-07
200
1.9%
Sep-07
283
2.5%
Dec-07
291
2.8%
Mar-08
258
2.6%
Jun-08
221
2.0%
Sep-08
264
2.3%
Dec-08
304
3.0%
Mar-08
294
3.10%
Jun-09
274
2.5%
Sep-09
377
3.4%
Dec-09
511
4.9%
Mar-10
413
4.1%
Jun-10
407
3.8%
Sep-10
387
3.3%
Dec-10
413
3.9%
Mar-11
426
4.2%
Source: GlobalData, New Zealand Wind Ministry of Economic Development
There are no specific policies supporting wind power in the country which has slowed the growth of the
sector. Some of the regulations that have affected the wind power sector in New Zealand are discussed
below.

Page 136
9.4.1
Resource Management Act 1991
The Resource Management Act (RMA) is the main part of the environmental regulations framework in
New Zealand. The RMA is a legislation which influences decisions regarding the wind project to be
evaluated against the adverse environmental effects that project may establish. The decision making
jurisdiction are district and/or regional councils who verify these effects against the potential of projects
advantages. In the case of wind energy, the effects are borne locally (visual and noise pollution) while the
benefits are enjoyed at a national level (greater use of renewable energy).
The difference between community costs and national advantages, inclusive of stipulations for the public
involved in the process, has led to postponement of many wind projects under the RMA process.
9.4.2
Project to Reduce Emissions
To date, the only significant policy instrument used to support the wind industry in New Zealand is the
Project to Reduce Emissions (PRE). PRE was a government run tender program for projects that would
decrease GHG emissions. It was terminated because officials advised that it was uncertain whether it was
contributing to a reduction in New Zealands carbon emissions deficit, beyond the units assigned to the
projects.
The winning tenders received one carbon credit for every ton of CO2 that would have been emitted if their
project did not go ahead. These projects could relate to electricity generation, heat generation or energy
efficiency, and had to provide a minimum reduction in emissions of 10,000 tons of CO2 equivalent in the
First Commitment Period (2008-2012) under the Kyoto Protocol. These carbon credits could then be sold
on the international market.
Thirteen wind projects were successful recipients of carbon credits under PRE: Tararua Stage II, Te Apiti,
Te Rere Hau, Awhitu, Wainuiomata Hills, the Hau Nui extension, Mokairau, Taraponui, White Hill, Tararua
stage III, Titiokura, Awakino, Rock and Pillar Wind Farm (NZCCO, 2007). PRE credits made a critical
difference to whether wind projects would go ahead or not.
9.5
Financial Incentives and Policy Support for Bioenergy, New Zealand
Biopower is one of the upcoming industries in New Zealand and improvements in technology and
supporting policies are helping the growth of biopower technologies. The biopower cumulative installed
capacity increased from around 75 MW in 2001 to more than 118 MW in 2010; it is expected to reach 212
MW in 2020.
The biopower markets are largely policy dependent as the generation of biopower in most countries is not
as competitive as fossil fuels. The regulatory framework and policy structure in New Zealand has led to a
significant development of the biopower industry. In the wake of growing energy security and
environmental concerns, support mechanisms in favor of biopower are expected to increase.
9.5.1
Biodiesel Grant Scheme
The biodiesel grant program was introduced in May 2009 and started on July 1, 2009 with a funding pool
of NZD12m per year for three years. The scheme offers grants up to NZD0.425 per liter to biodiesel
manufacturers and any biodiesel sold must be used in internal combustion engines as a 20% mixture with
regular diesel.
9.5.2
Wood Energy, Grants
In order to encourage the growth of wood fuel as an energy source, the Energy Efficiency and
Conservation Authority (EECA) offers substantial grants to assist both public and private organizations
who are either investigating or implementing a wood fuel system within their organization; or contributing
to the development of the wood fuel industry (for example, as a supplier), or exploring opportunities.
The two types of grants available under the program are detailed below:

Page 137
9.5.2.1
Business grants
A subsidy of up to 40% of the capital cost of the project, with a minimum of NZD10,000 and a maximum of
NZD200,000 per grant.
The funding is available for the projects that have the capacity for industry adoption, or have a payback
period or rate of return.
9.5.2.2
Feasibility study grants
The EECA will fund renewable technologies like bioenergy and geothermal projects. The renewable
energy feasibility study grant has allocated fund of about $25,000, up to 40% of the feasibility study.
Applicants interested in this grant should either be the owner of the plant or the end user. The EECA
offers grants for the feasibility study dependent on the meters of collector location anticipated on the basis
of acknowledgement of the feasibility study.
9.5.3
New Zealand Bioenergy Initiative
The bioenergy initiative under the sustainable land management and climate change policy aims to
increase the use of bioenergy in the country. The initiative aims to extend the work of the Forest Industry
Development Agendas (FIDA) Bioenergy Advisory Group to include:
The key initiatives in this project are:
Industrial Scale Co-Generation Demonstration Pilots: The project will amplify the work of the FIDA
Bioenergy Advisory Group to permit co-financing of industrial-scale co-generation demonstration
pilots.
Collecting In-Forest Residues. Research will be carried out to find economical techniques for
accumulating wood residues from forests.
The governments investments available for the initiative are detailed in the table below:
Table 71:
Initiative
Bioenergy Initiative, New Zealand, Government Funding Available , 2007-2011

2007/08 (NZDm)
2008/09 (NZDm)
2009/10 (NZDm)
Total to 2011 (NZDm)
3.4
1.8
7.2
Bioenergy
Source: GlobalData, Ministry of Agriculture and Forestry
The initiative is legislated by the FIDA Government-industry Bioenergy Advisory Group, which is handled
by the EECA.
9.5.4
Low Carbon Energy Technologies Fund
The Low Carbon Energy Technologies (LCET) fund assists research associated with the scale-up and
exhibiting research on second generation biofuels.
The aim of the LCET fund is to achieve results in the R&D of second generation biofuels and other low
carbon liquid biofuels, including the demonstration stage, leading to commercial growth and consumption.
9.5.5
Ethanol Manufacturing Regulations
Ethanol consumed is an excise-free fuel when it is presented to and approved by the Chief Executive of
Customs. Bioethanol blends are confined to a limit of 10% ethanol for retail purpose in New Zealand.

Page 138
10
Renewable Energy Policy Framework, Vietnam
10.1 Renewable Energy Policy Framework, Vietnam, Overview

Vietnam has large oil and natural gas reserves which have made it a prominent energy exporter. The
growing population in Vietnam and the demand for more energy has posed a difficult situation for the
country in maintaining this growth in a sustainable manner.
Vietnam is expected to become more dependant on fossil fuel as it attempts to cater to the growing
demand. The government has come up with the master plan of power development known as the
Renewable Energy Action Plan (REAP). The main aim of the REAP is to use clean energy sources like
solar PV, wind energy, biomass and micro hydro in rural areas. REAP focus on providing individual
renewable energy systems for households and providing grid based renewable energy schemes.
One of the major barriers in the development of renewable energy is that there is a limited understanding
in the different technologies and there are no specific policies in place to encourage investors. Lack of
knowledge regarding renewable energy equipment maintenance adds to the problem.
The law on energy efficiency and conservation was initiated in 2010. This law provides policies to
encourage energy efficiency and conservation. The national energy policy stipulates that natural sources
have to be used efficiently and new forms of renewable energy have to be exploited to reduce emissions.
Legal frameworks and market oriented reforms have to be improved in the power sector. Presently the
electricity law and the environmental law approved by the national assembly are laws which encourage
the use of renewable energy.
10.2 Renewable Energy Policy Framework, Vietnam, Major Policies

10.2.1 Electricity Law
The electricity law relates to the investment in power development, electricity savings and power
management. The electricity sector law will create opportunities for commercial activities, ensuring
financial aspects to attract investments in the development of electricity; it will encourage the efficient use
of electricity and diffuse the importance of protecting the environment.
The law points out that the power market has to be developed and sophisticated technology has to be
used to come up with more power saving techniques. The use of renewable energy resources has to be
encouraged in rural and mountainous regions (IEA, 2012).
10.2.2 The Environmental Law

Article 33 states that developing renewable energy is important for environmental protection. The
environmental law provides regulations for environmental protection and initiates policies for the
development of renewable energy.
10.2.3 Decision 37
The new Decision No. 37/2011/QD-TTg (Decision 37) was passed and is effective from August 20, 2011;
it provides a support mechanism for wind energy projects in Vietnam. The FIT is VND1,614 /Kwh
(0.78/Kwh) for electricity produced through wind. The price was adjusted based on the December 21,
2012 exchange rate of VND/USD. Loans at preferential interest rates up to 80% of the total investment
cost are given to companies planning to build grid connected wind power projects. The wind power
projects are tax exempt for the first four years of commercial operation and have a 50% tax reduction for
the following nine years. Enterprises investing in wind power projects will benefit from a preferential
corporation income tax of 10% for the lifetime of the project.

Page 139
Machinery, materials and tools which are not produced domestically and are imported as fixed assets of
the wind power projects will be exempt from import duties. The Vietnamese Ministry of Industry and Trade
(MoIT) will certify that machines and equipment imported for wind energy projects fall under this provision.
Machinery, material and tools imported for direct use of wind power projects connected to grid are exempt
from VAT. Land use fees or land lease fees (the amount paid by the investor to the state for the use or
lease of land) are tax exempt for the lifetime of the wind power projects connected to the grid.
Environmental protection fees are generally levied on the organizations or individuals who use the natural
resources, the funds collected are then used for the protection of the environment; there are also tax
exemptions for wind power projects connected to the grid.

Page 140
11
Renewable Energy Policy Framework, Taiwan
11.1 Renewable Energy Policy Framework, Taiwan, Major Policies

11.1.1 Renewable Energy Development Act
The Renewable Energy Development Act (REDA) was passed on June 12, 2009 for long-term renewable
energy development in Taiwan. The act focuses on energy diversification, GHG emissions reduction and
the promotion of the countrys emerging renewable energy power. The objective of REDA is to increase
renewable energy capacity from 6,500 MW to 10,000 MW in over 20 years. The types of renewable
energy covered under this act are solar, biomass, geothermal, ocean, wind, non-pumped-storage hydro,
and waste conversion. Through the implementation of supportive programs such as the renewable energy
purchase mechanism, it provides incentives for demonstration programs and promotes renewable energy
for public use. The act offers incentives to power providers for the purchase of renewable energy and
connects the national grid to renewable power facilities.
The renewable energy acquisition mechanism provides incentives for the installation of renewable
equipment and the grid operator is obligated to connect this power. The purchase price of power by the
grid operator will be decided and announced by the Ministry of Economic Affairs (MOEA). The power
purchase price will be reviewed and adjusted annually. The government will provide a subsidy for the
purchase of renewable energy equipment and for technological development. Subsidies for solar thermal
energy and biofuels are provided by the Petroleum Fund and Agricultural Development Fund.
Once the renewable energy power projects achieve a certain capacity, they are allowed to apply power
regulations related to acquisition of land-use rights, use procedures, and disposition. The land used for
the development of renewable power plants can be acquired under public utility qualification as stated in
the Urban Planning Law, the Forestry Act, and the Fisheries Act. The act supports renewable power
generation by simplifying the provision of the required licenses and providing FIT exemptions for importing
renewable energy equipment.

Page 141
11.1.2 Feed-in Tariffs

The 2011 FIT adjustment by the MOEA reduced FITs for PV by around 30% as there was considerable
reduction in solar PV costs. In 2011, solar PV and wind power had a cap of 70 MW and 100 MW
respectively. The following table provides the FIT rates for applicable renewable energy sources in
Taiwan.
Table 72:
Feed-in Tariff, Taiwan, TWD/kW, 2011
Type of Renewable
Energy
Installed capacity (kW)
FIT rate
(TWD/kWh)
Percentage adjustment from 2009

rate
1 X < 10
10.3185
-7.77%
10 X < 100
9.1799
-29.23%
100 X < 500
8.8241
-31.98%
X 500
7.9701
-28.32%
Regardless of capacity
size
7.3297
-34.08%
1 X < 10
7.3562
1.17%
X 10
2.6138
9.67%
size
5.5626
32.50%
Geothermal
size
4.8039
-7.33%
Biomass
size
2.1821
5.85%
Waste-Based
size
2.6875
28.72%
Hydro
size
2.1821
5.85%
Others
size
2.1821
5.85%
Roof-Mounted
PV
Ground Mounted
On Shore
Wind
Off-Shore
Source: GlobalData, MOEA
Taiwan has revised the solar FITs for 2012 as there was a considerable drop in the prices of solar
modules in 2011. According to the new FIT amendment, the tariffs will change twice in a year. A discount
rate ranging from 5.8% to 8.3% will apply to PV systems which go online prior to June 30, 2012. For large
PV systems, the winning bid goes to the bidder quoting the highest discount rate.

Page 142
The table below provides FIT rates for solar PV in Taiwan.

Table 73:
Feed-in Tariff for Solar PV, Taiwan, TWD/kW, 2012
System Type
January-June 2012 (TWD/kWh)
July-December 2012 (TWD/kWh)
Roof-top
1 kW - <10 kW
Reduction (%)
9.4645
9.2510
8.3%
10.3%
Roof-top
10 kW - <100 kW
8.5394
8.3259
7.0%
9.3%
Roof-top
100 kW - <500 kW
8.1836
7.9701
7.3%
9.7%
Roof-top
>500 kW
7.3297
7.1873
8.0%
9.8%
Ground Mounted
>1 kW
6.9027
6.7604
5.8%
7.8%
Source: GlobalData, MOEA
11.1.3 Renewable Energy Incentives

The program provides incentives for renewable energy sources in the form of equipment subsidies and
tax incentives. Under the statute for upgrading industries, renewable energy equipment or technology
investment is eligible for 7% income tax for the first five years. After this period, the equipment will be
subject to increasing degression rates. Imported renewable energy equipment approved by the MOEA is
exempt from import tax and business tax. For renewable energy stock owners, individuals or firms,
income tax of 10%20% is deducted. The Renewable Energy Development Fund will provide low interest
loans to firms for the purchase of renewable energy equipment. The maximum annual interest rate will not
exceed the Post Offices two-year fixed interest rate plus 2.45%. In 2000, the Bureau of Energy
implemented subsidy guidelines for the establishment of solar PV demonstration systems. Under this
system, solar PV projects are eligible for TWD150,000/kW, limited at a maximum amount of 50% of the
projects installation cost.
11.1.4 Green Energy Sunrise Program

In 2009, Taiwans government announced the green energy sunrise program following discussions at the
third national energy conference. The program focuses on the promotion of seven major green energy
industries:
Solar PV
LED
Wind power
Biomass
Hydrogen and fuel cells
Energy Information and Communication Technology (EICT)
Electric Vehicles (EV)

Page 143
In order to promote its domestic market and increase market penetration, the program carried out five
promotional strategies:
Technology innovation
Investments focused on the seven industries mentioned above
Cooperative investment environment
Increase domestic market
Increase the export market and improve trading relations with China
This program started in 2009 and will end in 2012. The government plans to invest around TWD37 billion
in this program and expects to drive around TWD200 billion through private sector investments. It also
expects to create 110,000 green jobs (APEC, 2010).
11.1.5 National Science and Technology Program - Energy

The National Science Council launched the National Science and Technology Program - Energy (NEP) in
2009. The program is mainly run by local research universities such as the National Taiwan University,
National Cheng Kung University and National Central University. The Atomic Energy Council and Taiwan
Power Company are also involved in the functioning of this program. Figure 45 shows the budget
allocation under the NEP for five years. Solar PV is categorized under new energy technologies.
Figure 36: National Science and Technology Program - Energy, Taiwan, Budget Allocation,
TWDm, 20092013
10,000
9,000
8,000
TWDm
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2009
New Energy Technologies
2010
2011
2012
Energy Saving and Carbon Reduction
2013
Talents Cultivation
Energy Strategies
Source: GlobalData, National Science and Technology Program Energy
Table 74: National Science and Technology Program - Energy, Taiwan, Budget Allocation,
TWDm, 20092013
Research Areas
Budget Allocation (TNDm)

2009
2010
2011
2012
2013
2,253
3,030
2,854
3,670
4,451
Energy saving and carbon reduction
732
1,550
2,158
3,159
3,908
Talents cultivation
136
192
408
526
674
Energy strategies
221
273
283
226
191
New energy technologies
Source: GlobalData, National Science and Technology Program Energy

Page 144
12
Appendix
12.1 Abbreviations
Table 75:
Abbreviations
ACT
Australian Capital Territory
AEMC
Australian Energy Market Commission
AER
Australian Energy Regulator
ARENA
Australian Renewable Energy Agency
AWEFS
Australian Wind Energy Forecasting System
BAU
Business-as-usual
BDTC
Biogas Development and Training Centres
CCS
Carbon Capture And Storage
CEC
Clean Energy Council
CEI
Clean Energy Initiative
CFA
Central Financial Assistance
CFL
Compact Fluorescent Lamps
CFT
Clean Technology Fund
COAG
Council of Australian Governments
COD
Commercial Operation Date
CWET
Center for Wind Energy Technology
DLEP
District Level Renewable Energy Parks
DPR
Detailed Project Report
DRET
Department of Resources, Energy and Tourism
EECA
Energy Efficiency and Conservation Authority
EGATE
Electricity Generating Authority of Thailand
EIF
Education Investment Fund
ENCON
The Energy Conservation Promotion Fund
EPG
Ethanol Production Grants
ETBE
Ethyl Tert-Butyl Ether
ETS
Emissions Trading Scheme
FDR
Fixed Deposit Receipts
FFA
Free Fatty Acid
FIDA
Forest Industry Development Agenda
FIPB
Foreign Investment Promotion Board
FIs
Financial Institutions
FIT
Feed-in Tariffs
GBI
Generation Based Incentive
GDP
Gross domestic product
GOI
Government of India
GOJ
Government of Japan
GRIHA
Green Rating for Integrated Habitat Assessment
GST
Goods and Services Tax

Page 145
GW
Gigawatt
GWh
Gigawatt hours
IREDA
Indian Renewable Energy Development Agency
JNNSM
Jawaharlal Nehru National Solar Mission
JREPP
Japan Renewable Energy Policy Platform
LPG
Liquefied Petroleum Gas
LRET
Large scale Renewable Energy Target
M2M
MAFF
Ministry of Agriculture Forestry and Fisheries
MEA
Metropolitan Electricity Authority
MNRE
Ministry of New and Renewable Energy
MOEA
Ministry of Economic Affairs
MOST
Ministry of Science and Technology
MOU
Memorandum of Understanding
MPP
Minimum Purchase Price
MRET
Mandatory Renewable Energy Target
MSP
Minimum Support Price
MW
Megawatt
NBFCs
Non-Banking Financial Companies
NBMMP
National Biogas and Manure Management Program
NDRC
Chinas National Development and Reform Commission
NEA
National Energy Administration
NEDO
New Energy and Industrial Technology Development Organization
NEM
National Energy Market
NEP
National Science and Technology Program - Energy
NEPC
National Energy Policy Council
NSW
New South Wales
NZEECS
New Zealand Energy Efficiency and Conservation Strategy
OMCs
Oil Marketing Companies
ORER
Office of the Renewable Energy Regulator
PEA
Provincial Electricity Authority
PPA
Power Purchase Agreements
PV
Photovoltaic
R&D
Research and Development
RA
Renewables Australia
RECs
Renewable Energy Certificates
REDP
Renewable Energy Demonstration Program
REEEP
REEF
Renewable Energy Equity Fund
REF
Renewable Energy Fund
RERC
Rajasthan State Electricity Regulatory Commission
RET
Renewable Energy Target

Page 146
RPP
Renewable Power Percentage
RPS
RRPGP
Renewable Remote Power Generation Program
SBCVC
Softbank China Venture Capital
SEDA
Sustainable Energy Development Authority
SERC
State Electricity Regulatory Commissions
SGU
Small Generation Unit
SLEP
State Level Renewable Energy Parks
SPP
Small Power Producer Program
SRES
Small scale Renewable Energy Scheme
STC
Small-scale Technology Certificates
SXVP
Southern Cross Venture Partners
TERI
The Energy and Resource Institute
VEEC
Victorian Energy Efficiency Certificate
VRES
Victorian Renewable Energy Certificates
VSPP
Very Small Power Producer Program
Source: Global Data
12.2 Bibliography
Table 76:
Bibliography List
http://www.climatechange.gov.au
http://www.orer.gov.au
http://www.reeep.org
http://www.ret.gov.au
http://www.deewr.gov.au
http://www.budget.gov.au
http://www.aph.gov.au
http://www.ausindustry.gov.au
Australia
http://www.environment.act.gov.au
http://www.pir.sa.gov.au
http://www.treasury.gov.au
http://www.ato.gov.au
http://www.environment.gov.au
http://www.austwidesolar.com.au
http://www.dpi.vic.gov.au
http://www.resourcesmart.vic.gov.au
http://www.energy.wa.gov.au
China
http://www.apcoworldwide.com
http://martinot.info
http://www.renewableenergyworld.com
http://www.businessgreen.com
http://www.energytrend.com

Page 147
http://www.biomass-energy.org
http://www.ecoworld.com
http://www.cwpc.cn
http://en.ndrc.gov.cn/
http://www.platts.com
http://www.pib.nic.in
http://www.mnre.gov.in
http://www.thehindu.com
http://www.ireda.gov.in
India
http://www.cercind.gov.in
http://nvvn.co.in
http://www.grihaindia.org
http://www.powerexindia.com/pxil
http://www.iexindia.com
http://www.geni.org
http://www.meti.go.jp
http://www.japanfs.org
Japan
http://www.enecho.meti.go.jp/english/index.htm
http://www.fepc.or.jp/english
http://www.nedo.go.jp/english
http://www.sustainablebusiness.com
http://www.renewableenergyworld.com
Thailand
http://www.iea.org
http://www.adb.org
http://www.unido-aaitpc.org
http://www.iea.org
http://www.kemco.or.kr
South Korea
http://www.lexology.com
http://www.sundasolar.com
http://www.reeep.org
http://www.egnret.ewg.apec.org
http://www.iea.org
New Zealand
http://www.energywise.govt.nz
http://www.mfe.govt.nz
http://www.worldenergy.org
Vietnam
http://www.iea.org
http://www.greenbiz.com
http://www.cepd.gov.tw
Taiwan
http://www.iea.org
http://investtaiwan.nat.gov.tw
http://nstpe.ntu.edu.tw
Source: GlobalData

Page 148
12.3 GlobalDatas Methodology

GlobalData dedicated research and analysis teams consist of experienced professionals with a pedigree
in marketing, market research, consulting backgrounds in the energy industry and advanced statistical
expertise.
GlobalData adheres to the Codes of Practice of the Market Research Society (www.mrs.org.uk) and the
Strategic and Competitive Intelligence Professionals (www.scip.org).
All GlobalData databases are continuously updated and revised. The following research methodology is
followed for all databases and reports.
12.4 Coverage
The objective of updating GlobalData coverage is to ensure that it represents the most up to date
vision of the industry possible.
Changes in the industry taxonomy are built on the basis of extensive research of company,
association and competitor sources.
Company coverage is based on three key factors: market capitalization, revenues and media
attention/innovation/ market potential.
An exhaustive search of 56 member exchanges is conducted and companies are prioritized on the
basis of their market capitalization.
The estimated revenues of all major companies, including private and governmental, are gathered
and used to prioritize coverage.
Companies which are making the news or which are of particular interest due to their innovative
approach are prioritized.
GlobalData aims to cover all major news events and deals in the power industry, updated on a daily
basis.
12.5 Secondary Research

The research process begins with exhaustive secondary research on internal and external sources being
carried out to source qualitative and quantitative information relating to each market.
The secondary research sources that are typically referred to include, but are not limited to:
Company websites, annual reports, financial reports, broker reports, investor presentations and SEC
filings
Industry trade journals and other literature
Internal and external proprietary databases
National government documents, statistical databases and market reports
News articles, press releases and web-casts specific to the companies operating in the market

Page 149
12.6 Primary Research
GlobalData conducts hundreds of primary interviews a year with industry participants and
commentators in order to validate its data and analysis. A typical research interview fulfills the
following functions:
It provides first-hand information on the market size, market trends, growth trends, competitive
landscape and future outlook.
Helps in validating and strengthening the secondary research findings.
Further develops the Analysis Teams expertise and market understanding.
Primary research involves e-mail correspondence, telephone interviews as well as face-to-face

interviews for each market, category, segment and sub-segment across geographies.
The participants who typically take part in such a process include, but are not limited to:
Industry participants: CEOs, VPs, business development managers, market intelligence managers
and national sales managers.
Outside experts: investment bankers, valuation experts, research analysts and key opinion leaders
specializing in power industry.
12.7 Contact Us
If you have any queries about this report or would like further information, please contact
North America:
+1 646 395 5460
Europe:
+44 207 406 6653

+44 1204 543 523
Asia Pacific:
+91 40 6616 6700
Email:
info@globaldata.com
12.8 Disclaimer
All Rights Reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by
any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of
the publisher, GlobalData.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed.
Please note that the findings, conclusions and recommendations that GlobalData delivers will be based
on information gathered in good faith from both primary and secondary sources, whose accuracy we are
not always in a position to guarantee. As such GlobalData can accept no liability whatever for actions
taken based on any information that may subsequently prove to be incorrect.

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Publication Date: May 2012

Support Policy Measures Playing a Major Role in

China has led the development of renewable energy in the

Most of the measures initiated by governments have received a