Government incentive schemes

Trends and requirements

• There has been a progressive replacement of public investment in electricity generation with long-term private financing. Public financing is being reserved for investments that have a structuring nature.
• Agreement for CAE (official classification of economic sectors) with subsidized prices (feed-in-tariffs) during a period of reasonable time.
• Fixing the rate of return of investment capital.
• Tax reductions - tax on incomes, imports.
• Auctions for the purchase of energy for public and private entities, from renewable sources.

• LGCs and STCs, as discussed above, are the main Federal Government incentives for renewable energy investment in Australia.
• Between 2012 to 2021, ARENA has supported 612 projects and provided AUD1.81 billion in grant funding.
• Pursuant to the Australian Renewable Energy Agency Act 2011 (Cth), ARENA is entitled to approximately AUD1.93 billion in government funding until 30 June 2022 to provide financial assistance for (among other things), the research, development, demonstration and commercialization of renewable energy and related technologies.
• In the Federal Budget 2020-21, ARENA was funded an additional AUD1.62 billion in grant funding until 2032 to provide financial assistance for companies seeking to develop new technologies that will cut emissions in agriculture, manufacturing, industry and transport.
• In ARENA’s General Funding Strategy for 2021/22 – 2023/24, it has outlined its plans to support Australia’s transition to net zero emissions by providing funding for projects and future technologies that will:
  • reduce carbon emissions in the agriculture, manufacturing, industry and transport industry;
  • commercialize clean hydrogen; and
  • provide cost effective energy storage.

• Austria was relying on a feed-in tariff scheme for renewable energy generators until 2021.
• In July 2021 the Renewable Expansion Act was adopted which transposes Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources into Austrian law, The Renewable Expansion Act introduces a market premium as general incentive scheme instead of the previously granted fixed feed-in tariffs. The market premiums aim to compensate the difference between the production costs of electricity from renewable sources and the average market price for electricity. This effort is accompanied by planned tenders for all technologies (in the future).
• Under the Renewable Expansion Act consumers (mainly at a residential level), businesses and municipalities are encouraged to implement own solar or other onsite renewable generation technologies to assist Austria's RES efforts.

General

In Belgium, the most important subsidy mechanism is a green certificate scheme. This includes a guaranteed minimum price mechanism, where electricity network operators are required to purchase the green certificates at a guaranteed minimum price, subject to generation type and location of the asset. It should be observed that there are four parallel schemes of RSE support in Belgium. This results from the division of competences when it comes to renewable energy. 

As indicated, Belgium's political system is a federal system comprising a federal government level, as well as three regions and three communities. The competence to regulate renewable energy belongs to the regions (i.e. Flanders, Wallonia and Brussels Capital), rather than the federal government. In relation to renewable energy, the federal government is (only) competent to regulate the major infrastructures for energy storage, the transmission of electricity through grids with a voltage higher than 70 kV, the transmission network tariffs, the commodity tariffs for off-takers, and the production of energy in Belgium's territorial waters and its exclusive economic zone in the North Sea.  

Federal

On the federal level, a green certificates scheme applies in order to support offshore wind energy installations. It should be noted that the Federal Parliament adopted a new Act establishing a tender procedure for new concessions for offshore wind farms, whose operators will then be eligible for support. To date, the key modalities for this tender have not yet been elaborated in Royal and Ministerial Decrees. 

In addition, companies can reduce their taxable profits with an increased investment deduction for energy saving and energy recovery investments. 

Flanders

A green certificates scheme applies in order to support renewable energy installations in the Flemish Region. Regularly the subsidy levels and periods are adjusted downwards for new projects, including recently for projects receiving permits from 2020 onwards. 

The green certificates scheme does not apply to all renewable energy technologies. Certain types of renewable energy will (depending on their capacity) not be eligible for the green certificates scheme, but will receive subsidies depending on the type and capacity of the renewable energy installation. These subsidies are distributed by means of "calls for proposals". This is, for example, the case for photovoltaic installations with a capacity between 40 kW and 2 MW, and for wind turbines on land with a capacity between 10 kW and 300 kW. 

Brussels Capital Region

A green certificates scheme applies in order to support renewable energy installations in the Brussels Capital Region. The Coalition Agreement for the new Brussels Region government states that by 2024 (the end of the current legislature), the green certificates scheme and the percentage of certificates allocated will be readjusted, taking into account the reduction of the cost of renewable energy systems. In addition, supplementary subsidies are offered to companies willing to invest in "green" projects, subject to the applicant meeting certain requirements. 

Wallonia

A green certificates scheme applies in order to support renewable energy installations in the Walloon Region. In addition, a wide range of support including energy bonuses, investment aid for cogeneration plants or processing plants, and tax deductions for investments, is offered. 

• In large-scale renewables projects, the most common funding sources are two government-controlled Brazilian development banks, BNDES (Banco Nacional de Desenvolvimento Econômico e Social), Brazil’s main development bank, and BNB (Banco do Nordeste), both being extremely active in the sector.
  
  BNDES, for example, is expected to finance more than BRL40 billion in renewables projects in the upcoming years.
• Certain local development banks, such as BDMG (Banco de Desenvolvimento de Minas Gerais), are also active in the development of renewables projects.

• The federal government’s updated climate plan from December 2020, as mentioned above, aims to raise carbon price from CAD50 per tonne in 2022 to CAD170 per tonne in 2030. 
• Clean Energy Canada and Navius Research established a research report stating clean energy jobs would increase twice as quickly under this new plan by representing 85,000 more job positions by 2030. 
• Ontario is expected to grow its clean energy sector by 43%, representing 220,700 jobs in 2030.  
• Greener Homes initiative by the federal government incentivizes homeowners to make their homesmore energy efficient. 
• Green Infrastructure Phase II is a federal initiative that aims to accelerate the development of next-generation clean energy infrastructure by investing in commercial-scale technology demonstrations, deployment, community capacity building, and targeted research and development. 
• The Clean Growth in Natural Resource Sectors Program is a CAD155 million federal investment in clean technology research and development and demonstration projects in three Canadian energy sectors: energy, mining and forestry. 
• The Energy Innovation Program is a federal program that aims to advance clean energy technologies to help Canada meet its climate change targets and support the transition to a low-carbon economy. Its key priority areas are renewable, smart grid and storage systems; reducing diesel use by industrial operators in northern and remote communities; methane and VOC emission reduction; reducing GHG emissions in the building sector; carbon capture, use and storage; and improving industrial efficiency. 

• Quota system. In Chile, a quota system requires power companies that have an installed capacity of more than
  200 MW and that withdraw energy from the electrical grid for trading with distribution companies and final consumers to certify that a certain percentage of their energy withdrawal comes from renewable energy sources. This percentage has increased every year until reaching 20% in 2025. However, as mentioned before, this percentage was already achieved in 2021;
• Toll exception. One of the advantages provided to renewable energy projects is the exemption from paying tolls for using the main electrical transmission system. Renewable plants that generate less than 9 MW are completely exempt, and those that generate more than 9 MW but less than 20 MW are partially exempt;
• Concessions for onerous use of fiscal property. The Public Property Ministry published several general instructions regarding concessions for onerous use of fiscal property in order to incentivize the development of renewable energy projects on public land;
• Corporation for the Promotion of Production (CORFO). Development of renewable energy projects has been promoted through the allocation of CORFO subsidies for conducting investment feasibility studies and remaining stages of the projects. In addition, CORFO has approved a long-term credit line for financing renewable energy projects with an installed capacity of up 20 MW. CORFO has also call for financing of green hydrogen to attract investments of US$1000 million;
• Opting for the Stabilized Price for Small and Distributed Generation Facilities. Opting for the Stabilized Price for Small Means of Generation and Distributed Generation, whereby generators of 9 MW or less are allowed to sell their energy at marginal cost, that is, spot price, or at a different fixed price, which will be calculated in hourly blocks;
• Transfer of NCRE Attributes. Article 150 bis of the LGSE provides that power utilities that withdraw energy with an installed capacity greater than 200 MW must prove that a percentage comes from energy generated by means of non-conventional renewable energies, a percentage that is gradual. Generators can meet the required percentage either through their own projects or by purchasing energy from renewable energy projects. LGSE regulates that those who exploit NCRE sources may benefit from the quota requirement, with the possibility of transferring the surplus to those who cannot comply with their own NCRE quota (which in the market has been referred to as NCRE attributes), even if they belong to different electricity systems.

The financial incentives for investments in the renewable energy sector in Côte d'Ivoire exist, specifically the advantages granted within the Investment Code and the reduction of taxes on certain renewable energy equipment: 

The value added tax at 9% on solar equipment 

An important tax incentive is provided by the annex to the Finance Act No. 2011 – 480 of December 28, 2011, on the state budget for the 2012 management, under the value added tax (VAT). 

As part of the promotion of solar energy, which remains one of the important aspects of the government's energy policy, the scope of the reduced VAT rate of 9% is applicable to solar energy production equipment, codified by Article 359 of the General Tax Code. 

The incentive schemes of the Investment Code 

Order No. 2012 – 487 of June 7, 2012, on the Investment Code in Côte d'Ivoire provides two main tax incentive schemes for investments in the country, including those in the field of Renewable Energy. 

The investment declaration regime 

The advantages granted under this regime vary from 5 to 15 years depending on the investment zone (A=5 years, B=8 years and C=15 years) and concern exclusively the exploitation phase. 

These tax benefits include: 

• Exemption from the tax on industrial and commercial profits or from the tax on non-commercial profits or from the tax on agricultural profits;
• The exemption from the contribution of patents and licenses;̶
• The reduction of 80% for zone B and 90% for zone C of the amount of the contribution payable by employers, excluding the apprenticeship tax and the additional tax for continuing professional training. 

The investment approval system 

The operators of the sector of the Renewable Energies are authorized under the terms of the code of the investment mentioned above to approve their programs of investment to benefit, no matter the zone of investments, from the advantages hereafter, in addition to those indicated previously for the regime of the declaration: 

• The reduction of 50% of the amount of duties to be paid to the customs on equipment and materials as well as on the first batch of spare parts, for an amount of investment lower than the higher threshold, except for the community levies.
• A 40% reduction in the amount of customs duties on equipment and materials as well as on the first batch of spare parts, for an investment amount at least equal to the upper threshold, except for community levies.̶
• Total exemption from VAT. 

In addition to these existing financial supports, an inter-ministerial decree is planned to determine and apply the tariff grid (price model) for the remuneration of the operators in charge of the management of the transmission facilities belonging to the state, based on the volume of energy transited, as well as a tariff for the remuneration of offgrid systems.

The main sources of funding are from national programs and programs financed from revenues from the sale of emission allowances and the EU Multiannual Financial Framework.

As mentioned above, the Czech Republic acceded to the EU in 2004. Since then, a lot of programs have been financed by the EU, such as European Regional Development Fund, Cohesion Fund, the Equitable Transition Fund, InvestEU Programme, LIFE program, Horizon Europe.

Some of the national programs are:

• EFEKT 2017-2021 – This is a state support program, which is covered by Ministry of the Environment of the Czech Republic. It aims at energy savings.
• Programme Nová zelená úsporám – It covers the reduction of the energy performance of buildings. This support is focused on family and apartment buildings and state-owned buildings.
• Operational Programme for the Environment – It supports sustainable water management and transition to a circular economy. It is focused on adaptation to climate change, strengthening green infrastructure in cities and reducing pollution.

• Large-scale offshore wind farm projects are tendered through a public tender process where bidders contest based on the lowest subsidy for the projects. For the most recent tender, the 800 to 1,000 MW Thor Offshore Wind Farm bidders have tendered without any subsidies and the tender was consequently decided as a lottery.
• Generally, subsidies are being phased out. The primary scheme remaining is a technology neutral scheme that provides a subsidy based on a contract for differences, ensuring stable pricing.

• The main support schemes that have been implemented for the promotion of renewable energies are the feed-in tariff (FIT) and feed-in premium (FIP).
  • The FIT scheme relies on the obligation imposed on EDF, and certain other local distribution operators (LDOs), to purchase electricity generated by independent power producers from renewable sources at a preferential tariff - the FIT. This price, set by the minister of economy, is higher than the market price.
  • Under the FIP scheme, producers selling electricity from renewable sources on the market at market prices receive compensation based on an agreement to be entered into with EDF or an LDO.
• Under these schemes, the extra charges imposed on EDF or on the LDOs are compensated through a contribution (payment) toward the electricity as a public service (contribution au service public de l’électricité or CSPE), which is collected in full and directly from end-users.
• These support schemes are made available as follows:
  • Small-size renewable plants may be granted the possibility to enter into either FIT or FIP contracts, depending on their size, through the so-called “open-counter” procedure (guichet ouvert).
  • Large-scale facilities may only benefit from the FIP scheme if they are awarded such incentive in the context of calls for tenders, launched from time to time by the state.

The Renewable Energy Masterplan 2019 contains some incentives that the government seeks to provide in support of renewable energy sector such tax breaks, capital subsidies, loan guarantees, etc. They include:

• Substantial tax reductions for manufacturing and assembling;
• Materials, components, equipment and machinery (that cannot be obtained locally) for manufacturing or assembling, shall be exempted from import duty and VAT, up to the year 2025;
• Materials, components, equipment and machinery that Ghana has competitive advantage over, shall attract the relevant import duty and other applicable taxes to promote the local industry;
• Import of plant and plant parts for electricity generation from renewable energy resources, shall be exempted from import duty and VAT;
• Allocation of a quota for local industries in all government projects to facilitate expansion of the existing market; and
• Government shall provide a vehicle through existing facilities such as the Venture Capital Trust Fund to provide soft loans to local industries. 

Other incentives in the form of tax holidays, locational incentives and investment guarantees are scattered throughout the legislations affecting the renewable energy industry, tax statutes as well as other sector specific laws which contain provisions on renewable energy.

• In 2018 CLP introduced its Feed-in Tariff (FiT) Scheme in respect of electricity produced by solar or wind power systems with a generating capacity of up to 1 MW under the current Scheme of Control Agreements. Under the FiT Scheme, CLP will purchase the electricity produced by an approved renewable energy system once successfully connected to CLP's power grid. A smart meter will be installed to record the amount of electricity generated by the renewable energy system. 
• A summary of the key terms of the CLP FiT Scheme is set out below.

• As part of the Scheme of Control arrangements, from 1 January 2019, HKE agrees to purchase electricity generated from relevant renewable energy power system for the duration of the FiT Agreement at the applicable FiT rate stipulated in the FiT Agreement for generating capacity below 10 KW (for generating capacity above 10 KW, the FiT rate will need to be determined by a case by case basis with approval from the HKSAR Government). Under the FiT Scheme, HKE will purchase the electricity produced by an approved renewable energy system once successfully connected to HKE's power grid. A smart meter will be installed to record the amount of electricity generated by the renewable energy system.
• A summary of the key terms of the HKE FiT Scheme is set out below.

The main government incentive scheme related to renewable energy is METÁR, which aims to encourage new investments in electricity generation from renewable energy sources and increase the share of electricity generated from renewable energy sources for sustainable development. In general, METÁR subsidies can be granted for renewable electricity production linked to a new investment, where the investment has not yet started at the time of the application.

A tender is announced if the competent minister requests the Hungarian Energy and Public Utility Regulatory Authority to announce it. In its request the minister defines the most important characteristics of the tender, such as the maximum amount of subsidized capacity, maximum amount of subsidies, the interval of the subsidies, etc. In conclusion, the number of auctions, as well as the target capacity depends on the discretional power of the minister.

The tender shall be announced in a technology neutral form, but there are usually categories based on the nominal output of the power plants, independently from the technology. The subsidies are paid based on a subsidy contract, concluded with the Hungarian TSO.

In the tender, the offeror has to describe its production volume for which it applies for subsidies. If the bid wins, this amount of production will be subsidized. The METÁR scheme is a premium scheme which means that the company, who generates the electricity, sells the electricity on the market, and the TSO pays the difference between the market price and the subsidized price for the electricity generator.

Up to now the METÁR scheme was rather popular among investors, the capacities are always fully allocated. Usually there are one or two tenders every year.

Until 2017, there was another incentive scheme called KÁT, which means mandatory take-over system, where the Hungarian TSO purchased the generated electricity from the generator companies. This scheme is no longer available for new investments, but the companies, who applied and were awarded KÁT capacities, are entitled to sell the generated electricity to the TSO until their KÁT contract expires.

After the recent legislation changes, the generators who entered the KÁT system may not exit, they may only choose to enter the METÁR system instead (i.e. they are not allowed to sell their produced electricity on the wholesale market for market prices).

Similar changes were applied regarding the METÁR scheme. The power plants participating in the METÁR scheme shall conclude a contract with MAVIR Zrt. in accordance with its business rules and the commercial code. This contract – except for biomass or biogas power plants – may not be terminated by the power plant before the expiry of the subsidy period or before the total subsidized quantity of electricity has been accounted for.

These legislative changes mean that if a power plant, which has a KÁT or METÁR eligibility and already entered the respective system cannot exit these schemes, therefore they cannot sell their electricity on the wholesale market or via a PPA. The only option to sell the generated electricity on the wholesale market or via a PPA is not entering the KÁT or METÁR schemes, but in this case a special tax applies to the power plant as described in the paragraphs above.

The Hungarian Government subsidies residential rooftop solar panel installations. In the last tender, the intensity of subsidies was 100%, which means residentials were able to obtain solar panels for their homes at no cost. These kinds of measures help Hungarian households become sustainable and carbon neutral.

• The first support scheme for renewable energy sources (RES) was launched in Italy in 1992, including in the incentives all RES-E technologies, the FIT (Feed in Tariff) scheme, also known as CIP6. For the purposes of incentives, this legislation included the equating of renewable sources with assimilated sources, i.e., thermal sources using waste. The latter quickly exhausted the economic capacity of the capital account incentives of these laws delaying, according to some analysts, the production of real renewable energy.
• Formerly, incentives for renewable energy sources in Italy were mainly based on the Green Certificates (Certificati Verdi): marketable/tradable instruments corresponding to a certain amount of CO2 emissions, which are provided free of charge by the GSE to the operator of a plant powered by renewable sources with the aim of emitting less CO₂ than a plant powered by fossil sources would.
• Legislative Decree no. 28 of March 3, 2011, implementing the European directive, and the Ministerial Decree of July 6, 2012, overcame the mechanism of Green Certificates for plants commissioned after December 31, 2012, and the transition to new incentive mechanisms. The new incentives guarantee the payment of a tariff by the GSE on net energy production in addition to the revenues from the valorization of the energy.
• The Ministerial Decree of July 4, 2019, in continuity with the Ministerial Decree of July 6, 2012, and the Ministerial Decree of June 23, 2016, aims to promote, through economic support, the spread of small, medium and large size plants producing electricity from renewable sources. The plants that can benefit from the incentives provided for by the Decree are newly built photovoltaic plants, onshore wind power plants, hydroelectric plants and finally plants using sewage gas. The Ministerial Decree identifies four different groups depending on the source, the type of plant and the category of intervention. For each group, separate quotas of incentive power are envisaged, to be allocated through seven subsequent competitive procedures of register or auction, based on specific priority criteria or of the reduction in the level of incentives offered by operators when participating in the individual procedure.
• The Legislative Decree 199/2021 - already mentioned - provides for a new incentive system to be implemented by means of one or more ministerial decree(s) to be adopted by the Minister of Ecological Transition, after consulting ARERA and the Unified Conference, within 180 days from the entry into force of the provision (the deadline is now expired). For large plants (power ≥ 1 MW), the incentive will be awarded through competitive tender procedures carried out with reference to power quotas. The implementing decree could, for the first time, introduce quotas differentiated by geographical areas for the declared purpose of promoting synergies with the development of the electricity system and the process, also innovative, of identifying the so-called “suitable areas”. For small plants (power <1 MW), the incentive will be recognized (i) directly against a request to be submitted on the date of entry into operation of the plant "for plants with generation costs closest to market competitiveness", while (ii) "for innovative plants and for plants with higher generation costs" following the award of tenders in which power quotas are made available and selection criteria are established. To identify the categories of plants that fall into the first or second hypothesis we will have to wait for the implementing decrees.

The FIT/FIP regime as described above is the primary incentive scheme adopted to accelerate the use of renewable energy.

In addition, certain subsidies and preferable tax treatments are available for combined heat and power (co-generation).

• Kenya has in place a feed-in tariff scheme for renewable energy generators. Under the scheme, power producers are able to sell electricity generated to KPLC at a pre-determined tariff for a given period. The feed-in tariff scheme was introduced in 2008 through the 2008 FiT Policy, which covered wind, small hydro and biomass sources, for plants with capacities not exceeding 50 MW, 10 MW, and 40 MW respectively. The FiT Policy was revised in 2010 and 2012 to include geothermal, biogas and solar resources. The 2012 FiT Policy has been in use until the introduction of the FiT Policy, 2021 which exclusively covers renewable energy power plants not exceeding 20 MW in biomass, biogas and mini hydro technologies.
• In the past, the government of Kenya has also traditionally issued letters of support for energy projects approved for implementation by IPPs. This has been instrumental in ensuring the bankability of energy projects in Kenya. The PPA Taskforce has however recommended that moving forward, government support measures should only be issued in exceptional circumstances and for strategic projects of national interest. This has been entrenched in law under the PPP Act, 2021.
• There are also various tax incentives that are applicable to players in the renewable energy sector. These include:
  • VAT exemption on specialized equipment for the development and generation of solar and wind energy, including deep cycle batteries which use or store solar power; and
  • VAT exemption on inputs or raw materials supplied to solar equipment manufacturers for manufacture of solar equipment or deep cycle-sealed batteries which exclusively use or store solar power.
• Players in Kenya’s renewable energy sector also benefit from various tax incentives that apply to the energy sector at large. These include the exemption from tax on interest to be paid on loans from foreign sources for investing in the energy sector and exemption from tax on payments made to a non-resident for services rendered under a power purchase agreement.

• In the 2021-2022 budget, renewable energy has been identified as a new pillar for Mauritius’ economic growth. In light of the budget plan, the government has outlined its intention to take on board the following measures:
  • Setting up a National Biomass Framework, remunerating bagasse at MUR3.50 per kWh for all planters.
  • Investment by the CEB over the next three years of some MUR5.3 billion in increased battery capacity up to 40 MW, Gas Insulated Switchgear (GIS) substations and a 10 MW solar farm at Tamarind Falls, Henrietta.
  • Request for proposal by the CEB to construct a MUR2.4 billion 40 MW wind farm.
  • Carrying out a feasibility study on implementing offshore windfarms and mini hydro power plants and on the safe disposal of used solar panels and batteries.
  • Incentivising the use of electric vehicles by making purchases duty-free, reducing registration duty and road tax.
  • Removing the 5% excise duty on electric vans of up to 180 kW used to transport goods.
  • Allowing owners of electric vehicles to install a PV system not exceeding 10 kW to charge their vehicle and export any surplus to the grid.
  • Purchasing 25 electric buses for the National Transport Corporation to renew its fleet. 
• The National Biomass Framework will encourage more landowners in Mauritius to engage in the production of renewable energy from biomass sources such as bagasse and consequently ensure a more equitable contribution from the sugarcane industry to support small farmers.
• Furthermore, the incentives and subsidies on electric vehicles will encourage a “greening” of the transport system in Mauritius which currently accounts for a significant proportion of energy consumption. The use of ethanol which is being produced only for export should also be encouraged.

• With PROLER calling for bids under a public tender system, the Government intends to provide greater transparency and competitiveness in the renewable energy sector, which will attract national and international investors.
• The draft of the Electricity Law proposes to liberalize mini-grids of 1 to 5 MW in Mozambique will see them struggle to compete with neighboring countries who are liberalizing their grids by up to 100 MW. This will need to be reviewed to remain competitive in this space.

Main schemes

The main support schemes that have been implemented are the SDE++ and the Energy Investment Allowance (EIA). 

• The Stimulering Duurzame Energie (SDE++) subsidy can be used for using CO₂ reducing technologies. With this subsidy, the difference between the costs of the use of the CO₂ reducing technology, and the profit will be covered. This subsidy can be used for various kind of technologies, including: renewable electricity, renewable heat, renewable gas, CO₂ reducing energy. This subsidy scheme, even as its predecessor the SDE+, is a great stimulus for renewable energy projects. Wind and solar have benefitted well from these schemes and are currently also supporting CCUS projects.
• The Energy Investment Allowance (EIA) provides for a tax reduction up to 11% to stimulate investments in energy-efficient technologies and sustainable energy. The tax reduction can be received for clearly defined investments (specific) and for tailor-made investments (generic) that result in substantial energy savings. 

Other schemes

Further support schemes that are made available include the ISDE, SSEH and the energy cost saving loan. 

• With the ISDE, homeowners can apply for subsidized solar water heater, hybrid heat pump and more “green” technology. Business owners can also apply for this subsidy.
• Several subsidy schemes are available for private homeowners to support investments in making houses and other buildings more sustainable through the SSEH and energy cost saving loan.

• New Zealand does not have a feed-in tariff scheme for renewable energy generators. Although there are no central government incentives to assist consumers or businesses in New Zealand to implement solar or other onsite renewable generation technologies, there are some local authorities that have initiatives in place to encourage renewable energy generation at a residential level.
• The Government has established the Low Emission Vehicles Contestable Fund as part of a package of initiatives to help stimulate electric vehicle uptake and meet the target of 64,000 electric vehicles on New Zealand roads by 2021. The Fun offers up to $6.5 million per year to projects that will help transition New Zealanders towards lower-emission, and electric vehicles.
• In 2019, the Government consulted on a Clean Car Standard (a fuel efficiency standard) and a Clean Car Discount (a "feebate" scheme) for new and used light vehicles. Legislation to implement the Clean Car Standard is expected to be introduced in 2021, with the standards applying 2022. At the timing of writing, the Government is still considering EV subsidy options, including the feebate scheme. Future activity is expected in this space with the CCC's first draft report, published in 2021, recommending that the majority of vehicles imported into New Zealand be electric by 2035.
• As part of its commitment to decarbonise transport, the Government has also committed $50 million in 2021 to assist councils to transition to a fully decarbonised public bus fleet by 2035.
• In 2020, the Government committed to making the public sector carbon neutral by 2025. As part of this pledge, mandated Crown agencies will be required to replace their car fleets with EV or hybrid-vehicles. 
• Overall, the New Zealand Emissions Trading Scheme, as well as the electricity market reforms are perhaps the greatest government incentives for renewable energy in New Zealand.

• The NERC made Regulations on Feed-In Tariffs for Renewable Energy sourced in Nigeria (REFIT) in 2015. The policy is designed to encourage small scale renewable projects which will either be connected to the grid, or directly to distribution companies. In addition, the government set a 10% target for renewable energy usage in the country by 2018 and for that to increase to 20% by 2030. It is expected that corporate appetite for renewable energy will increase in the near future based on the Federal Government’s National Renewable Energy and Energy Efficiency Policy 2015 (NREEEP), National Renewable Energy Action Plan 2015 – 2030 (NREAP), Power Sector Recovery Program 2018 (PSRP) amongst other policy documents. 
• In a bid to incentivise renewable energy investments in Nigeria, certain financial incentives have been introduced. For example, the Value Added Tax (Modification Order) 2020, has exempted certain renewable energy equipment from Value Added Tax. This includes: wind powered generators; solar powered generators; solar cells whether or not in modules or made up of panels; other photosensitive semiconductor devices; Solar DC generators of an output not exceeding 750 W; Solar DC generators of an output exceeding 750 W but not exceeding 75 kW; Solar DC generators of an output exceeding 75 kW but not exceeding 375 kW, and Solar DC generators of an output exceeding 375 kW. As such, the importation or domestic sale of this equipment would not attract VAT.
• The Federal Government of Nigeria (FGN) in response to the Covid-19 pandemic launched the Solar Power Naija Project in December 2020. This project focused on providing five million households with solar home systems for off-grid communities, under the Nigeria Economic Sustainability Plan (NESP). The implementation of the project will be facilitated by the Central Bank of Nigeria, which will make NGN140bn (approximately US$340m) available in direct and in-direct loans to qualifying projects.

• El-certificates (window "closed" 31 December 2021 related to onshore wind concessions, and currently assessed to have low value in the market).
• GoOs – in general preferred as evidence that the energy source is “green” – value in market.

• The Ministry of Energy and Mines grants the following benefits to Electricity Renewable Sources or Renewable Energy Resources (RER) – biomass, wind, solar, geothermal, tidal and hydraulic energy when the installed capacity does not exceed the 20 MW:
  • Daily dispatch in the National Interconnected Electric System (SEIN) priority.
  • Energy production variable cost equal to zero.̶
  • Energy tenders for the short-term market.̶
  • Guaranteed income in energy tenders. It does not include the delivery of (i) energy committed to third parties and (ii) energy that can be purchased in the SEIN itself.̶
  • Formula: Income from Energy Sales + Additional Price Paid to Tender Winners (“Premium”) = Guaranteed Income.̶
  • Special accelerated depreciation regime for income tax purposes. The depreciation rate will be applicable to the machinery, equipment and civil works necessaries for the plant installation and operation. The annual depreciation rate shall not exceed 20% as the annual global rate.̶
  • If there’s capacity in the SEIN’s transmission and/or distribution systems, the RER generators will have priority to connect. 
• The National Rural Electrification Plan (PNER) 2016-2025, in accordance with the Universal Energy Access Plan 2013-2022, aims to promote efficient, environmentally sustainable and equitable economic development in the energy sector, implementing projects to expand Universal Energy Access. These initiatives establish a policy for the sector to increase the rural electrification rate.
• On July 20, 2016, through Supreme Resolution No. 005-2016-MINAM, the Peruvian government created the Multisectoral Working Group of a temporary nature in charge of generating technical information to guide the implementation of the Nationally Determined Contributions (GTM-NDC), which is attached to the Ministry of Environment (MINAM). The GTM-NDC has following functions: 
  • Elaborate general guidelines that should guide the governmental sectors directly related to the country's NDCs in the elaboration of the evaluation and/or quantification of direct and indirect costs, the identification of environmental and social co-benefits, as well as other economic effects derived from the initiatives that provide technical support to the NDCs.
  • Elaborate a tentative programming and/or roadmap and/or action plan to propitiate the enabling conditions that will allow the implementation of the NDC in the short and medium term.̶
  • To report every six months and at the end of its term, through a final report, the results of the work of the working group and the fulfillment of its purpose. 
• From 2009 to date, the Peruvian government has held four RER auctions for the Interconnected Electricity System (SEIN) and one off-grid RER auction. Thus, progress was made with the diversification of electricity generation sources in the country. Eleven years after the first auction, almost 9% of the generating park is made up of non-conventional renewable energies. After four auctions, 249 projects have been presented, of which 64 have been awarded. Of these, 49 are already in commercial operation. In addition, technological progress and signals adopted by the regulator (such as not disclosing maximum prices) have helped to reduce the prices offered.
• In May 2018, the Ministry of Economy and Finance (MEF), in coordination with the Ministry of Environment (MINAM) charged higher taxes on fuels, taking into account their degree of harmfulness. In the case of vehicles, the selective consumption tax (ISC) applicable to new electric, gas and hybrid vehicles was abolished, while the applicable rates are 10% and 20% for new gasoline and diesel vehicles, respectively.
• In 2021 the Peruvian government approved and published the "Peru Sustainable Bond Framework," which seeks to finance environmental and social projects to achieve the principles of a dignified and productive society with a sustainable management of natural resources. The Framework establishes that it is the obligation of the government, through the General Directorate of the Public Treasury, to act as the issuer of carbon bonds.

• In Poland, the main support system is the auction system.
• The auction system was introduced into the Polish legal system on July 1, 2016, based on an amendment to the RES Act. The first auction was conducted in December 2016.
• The auction system allows electricity generators from RES to participate in auctions, the possible winning of which ensures generators' participation in this support system. It should also be noted that participation in the auction itself applies not only to renewable electricity generators (mainly solar or wind units) that are new or still under construction, but also to older units that started generating energy for the first time before July 1, 2016.
• RES auctions are organized once or twice a calendar year. Initially, the auction support system was to last until 2021, but it was extended until the end of 2027 on the basis of an amendment to the RES Act. The auction system itself is one of the main factors contributing to the dynamic development of the renewable energy sector in Poland in recent years. This dynamic development also concerns PV installations, the total installed capacity of which has increased at a very fast pace in recent years.
• In Poland, there are also FIT and FIP schemes. The FIT/FIP tariff scheme applies to biogas plants and small hydroelectric power plants with an installed electrical capacity of up to 1 MW, while the FiT scheme can cover installations with a capacity of up to 500 kW.
• According to Article 70a of the RES Act, the FIT system can be used by producers of electricity from renewable energy sources in a small installation or micro-installation, who sell or will sell unused electricity to an obliged seller.
• The FIP system may be used by generators of electricity from renewable energy sources in a renewable energy source installation with a total installed electrical capacity of no more than 1 MW, who sell or will sell unused electricity to a selected entity other than the obliged seller.
• The purchase price in the FIT/FIP schemes is 95%. (installations up to 500 kW) or 90% of the reference price determined for a given calendar year by a decree issued by the Ministry of Climate and Environment.
• The price applicable in the year in which the generator submitted its declaration of participation in the FIT/FIP scheme to the ERO is applied throughout the entire support period. The energy purchase price is also subject to annual indexation with the average annual consumer price index from the previous year.

There are several government funds and schemes directed at incentivizing investment on renewables.

Namely, the Innovation Support Fund (“Fundo de Apoio à Inovação”; “FAI”) was designed to support innovation, technological development and investment on renewable energy and energy efficiency.

The Energy Efficiency Fund (“Fundo de Eficiência Energética”, “FEE”) funds programs foreseen on the National Action Plan for Energy Efficiency (“Plano Nacional de Ação para a Eficiência Energética”, “PNAEE”).

Other funding programs and schemes can also be employed to incentivize investment on renewables and sustainable development, such as the Operational Program Sustainability and Efficiency on the Use of Resources (“Programa Operational Sustentabilidade e Eficiência no Uso de Recursos”, “PO SEUR”) , the Innovation, Technology and Circular Economy Fund (“Fundo de Inovação, Tecnologia e Economia Circular”, “FITEC”), or the Environmental Fund (“Fundo Ambiental”)

In 2020 the Ministry of Environment and Climate Action launched the Support Program for “More Sustainable Buildings” (Programa de Apoio “Edifícios Mais Sustentáveis”), under which persons can apply for State funding to improve the energetic efficiency of their houses, for instance by installing self-consumption electro productive centers or renewable sourced heating systems.

Besides national funding and schemes, EU funding is also available, namely through the European Strategic Energy Technology Plan (Set Plan), Horizon 2020, the European Regional Development Fund (ERDF), among others.

High ranking officials within the Ministry of Energy have declared that the ministry will carry out financing programs from European funds worth 13 billion euros until 2030. Out of the total financing available, part of the money is expected to come via “classic” European funds, and the other part through allocated funds within the National Recovery and Resilience Plan (PNRR).

More recently, the Ministry of Energy announced the opening of the application period for the PNRR-financed state aid scheme for renewable projects, with a budget of EUR 457.7 million, which seeks to facilitate and support the development of an additional 950 MW of installed capacity from renewable sources.

There is also an expected new incentive scheme for renewable capacities based on the contracts for difference (CfD) system, which the Ministry of Energy has been working on together with the EBRD; the scheme is expected further fuel the interest of investors in developing and financing renewable projects in Romania, by promising a more stable and predictable revenue model for such projects.

• In accordance with the provisions of General Tax Code, natural persons liable for income tax on the basis of their industrial and commercial profits, their agricultural profits or their profits from non-commercial professions, and who make investments in Senegal in equipment designed to use solar or wind energy, may benefit, on their request and under the legal requirements, a reduction on the amount of the said tax for which they are liable (Article 241).
  
  The amount of the tax reduction to which these taxpayers are entitled is equal to 30% of the total amount actually paid for the eligible investments.
  
  However, the discount granted for the taxation of a given year is limited to 25% of the tax amount of the financial year in which these amounts were paid.
  
  If, as a result of this cap, there is still a residual amount deductible from taxation, this residual amount can be carried forward to subsequent years. 
• Due to a regulation signed in 2020, there is also an exemption of VAT on materials or equipment used for power generation from renewable energies (solar, wind and biogas).

Electricity certificates

• The main incentive for building renewable energy production capacity in Sweden has been provided in the form of the Electricity Certificate (ECs) system (the "EC system"). The market for ECs and the EC system started in Sweden in 2003 and in 2012 has been extended to Norway. Currently, the market and the system will operate until 2045 although Norway has decided to leave the system in 2035. The stated aim of the EC system is to increase the amount of yearly renewable energy production in Sweden and Norway with a combined 28,4 TWh until 2020 (the goal was reached in May 2019), and in relation to Sweden an additional 18 TWh until 2030. The EC system is, as opposed to a feed-in tariff system, a market-based system.
• The obligation to buy ECs is prescribed by law and will continue in Sweden until 2045. The quotas increase up to the year 2030, to boost demand.
• Renewable electricity producers (biofuel, water-, wind-, solar-, wave- and geothermal power producers) are allocated 1 EC for each 1,000 KW/1 MW produced during the first 15 operational years of the relevant plant. In order to be eligible for allocation, a producer has to apply for certification with the Swedish Energy Agency (Sw. Energimyndigheten). Measurement of production by the hour is required at the production plant.
• As the EC system is market based, the increased volumes of renewable energy have resulted in a decrease of the ECs price. The importance of EC system as an incentive for investors in renewable energy has thus dropped significantly. 

Tax reductions

• Tax reductions may be granted for the production of renewable energy under certain conditions and each person or entity has to apply for such reductions as they are not granted automatically.

To attract foreign direct investment in the renewable energy sector, GOU has undertaken the following initiatives: 

• ERA has developed standardized power purchase agreements, implementation agreements and model licenses in consultation with development partners, lenders and project developers. This has resulted into the reduction in advisory service costs and the time required to negotiate the power purchase agreement between the developers and the single off-taker. 
• Development of the renewable energy feed-in-tariff as an instrument for promoting private sector generation of electricity from renewable energy sources. 
• Providing a value added tax exemption in respect of the supply of any goods and services to the contractors and subcontractors of hydroelectric power, solar power, geothermal power or biogas and wind energy projects.

The Feed-in Tariff (FiT) scheme was introduced in April 2010 by the Energy Act 2008 (and orders made under it) to promote the uptake of renewable and low-carbon electricity generation. It is limited to small scale renewable installations up to 5MW and requires participating licensed electricity suppliers to make payments on electricity generated and exported by accredited installations. The FiT scheme closed to new applicants on 1 April 2019, with some exceptions. In June 2019, the government announced its decision to introduce a new Smart Export Guarantee in Great Britain from 1 January 2020 to support small scale renewable generation. While this replaced the FiT scheme, it is worth highlighting that both schemes involve the making of payments from suppliers to generators. For larger scale regeneration, the FiT scheme has been replaced by the Contracts of Difference scheme. 

The Renewables Obligation (RO) scheme imposes an obligation on electricity suppliers to source a certain amount of electricity from renewable sources. The RO rewards the output of renewable energy over a period of time and similarly imposes financial penalties on the failure to do this. Compliance with the RO involves the use of RO certificates (ROCs) which are issued to eligible generators, and traded independently of the underlying electricity, whereby obliged suppliers purchased a quantity of ROCs from the market to demonstrate compliance. The RO was (before the advent of the Contracts for Difference scheme under the Energy Act 2013 – see below) the main financial mechanism used by the government to incentivise the deployment of large-scale renewable electricity projects in the UK. The RO scheme, which came into effect in 2002 in Great Britain (GB) and 2005 in Northern Ireland (NI), is closed to all new generating capacity as of 31 March 2017, except for extended deadlines for certain projects to January 2019 in GB, and March 2019 in NI. Newly accredited projects receive support for 20 years or until the final closure of the RO scheme on 31 March 2037, whichever is the earlier.

The Contracts for Difference (CfD) scheme was introduced by Part 2 (Electricity Market Reform) of the Energy Act 2013, which is the central plank of the legislative framework created for delivering secure, affordable and low carbon energy. The scheme was designed to replace the Renewables Obligation and incentivise investment in large-scale low carbon electricity generation. CfDs operate as private law contracts between low carbon electricity generators and the Low Carbon Contracts Company (LCCC), which manage CfD contracts. The CfD provides price security, and thereby bankability for a renewable generator by setting a “strike price” for the electricity generated. The CfD then pays the difference between the wholesale market price (the “reference price”) and the strike price. For example, should the market reference price fall below the strike price, the LCCC would pay a ‘top-up’ to the generator for the drop in value. However, should the market reference price exceed the strike price, the generator would pay back the difference to the LCCC. In this way, the CfD scheme abates the risk of market volatility that would otherwise discourage generators from entering into the renewables industry and lenders from financing these projects.