Energy pricing and
Energy pricing and incentives
The political purpose of incentive policies for PV is to facilitate an initial small-scale deployment to begin to grow the industry, even where the cost of PV is significantly above grid parity, to allow the industry to achieve the economies of scale necessary to reach grid parity. The policies are implemented to promote national energy independence, high tech job creation and reduction of CO2 emissions.
Three incentive mechanisms are used (often in combination):
- investment subsidies: the authorities refund part of the cost of installation of the system,
- Feed-in tariffs (FIT): the electricity utility buys PV electricity from the producer under a multiyear contract at a guaranteed rate.
- Solar Renewable Energy Certificates (SRECs)
