european position paper and action plan

4 May 2006 PV Policy Group - Thematic WG - 2nd meeting

European Position Paper and Action Plan

Support Schemes

dedicated to Willem and Wim

http://www.pvpolicy.org/default.asp



Content

Position• Conclusions Best Practice Report• Conclusion 1ste Thematic WG meeting• Position Team Proposal

Action plan• Conclusions Best Practice Report• Conclusion 1ste Thematic WG meeting• Position Team Proposal



Position: Conclusions Best Practice Report:

Feed in tariff – best practices:• Germany: high tariff, decreasing each year,

plus long term security

• Spain: high tariff, following electricity price developments, plus long term security




Feed in tariff – requirements:• differentiation of the tariff: local irradiation,

sort of installation • long term security of payment (return on

investment)• annual decrease of the tariff,

following/forcing reduction of costs




Tax incentives – best practices:• France: 40 % tax credit plus 14,1% VAT

reduction

• Sweden: 70 tax credits (for PV on public buildings)




Tax incentives requirements:• the total refunds should be worth the

administrative effort• the incentive scheme should be easily

accessible • the procedure should be simple and straight

forward




Tax incentive examples:• VAT reduction, • tax credits, independent of the taxes paid• tax deduction for part of the costs• possibility to move investment tax deduction for• or backward in time reduction of property taxes• no tax on investment profit




Other instruments – requirements:• the total refunds should be worth the administrative

effort

• the incentive scheme should be easily accessible, and the procedure should be simple and straight forward.




Other instruments – examples:• direct subsidies in % of project costs• direct subsidies in €/Wp• soft loans, well below the base-interest



Position: Conclusions 1st Thematic WG

Feed in tariff:• feed-in tariff and grid access code are crucial. • the consequences of feed-in tariff and subsidies

for final consumers (cost agreement) need to be further elaborated in the rapporteurs' working groups.

• feed-in tariff calculation is a complicated exercise.




Feed in tariff:• the reasons why feed-in tariff is the most

efficient market mechanism should be explained

• the objectives of the feed-in tariff scheme should be defined.

• feed-in tariff values should be moderate.




Feed in tariff:• the principle of cost effectiveness has to be

followed.• the feed-in tariff scheme should not be

modified• the feed-in tariff cost should be passed to the

consumers




Tax incentives:• not discussed

Other instruments:• not discussed



Position: Proposal

Reasoning:• no contribution from PV in EU in near future:

0,5% by 2010

• large long term market: 20 – 40 % in 2050



Position: Proposal

Reasoning:• need for preparation of desired long term

market

• no need for fast development of undesired niche markets



Position: Proposal

Statement:• long term PV market in Northern Europe is

building integrated PV

• long term markets for Southern Europe are (very) large scale power plants plus building integrated PV



Position: Proposal

Statement:• the support scheme should be independent

from the government budget

• the support scheme should be controlable (by the government



Position: Proposal

Set – up 1:• a limited feed in tariff for a small market

• an additional investment support to attract early adopters and fine-tune market growth



Position: Proposal

Set – up 1:combination of

feed-in tariff (1) and

investment support (2)

1 2



Position: Proposal

Set – up 2:• a feed in tariff with a ‘moving cap’:

a) annual capb) quotum cap



Position: Proposal

Recommendations for feed-in tariffs:• avoid combinations of high tariffs and caps.

• avoid tariffs, that cause unpredictable and uncontrollable market growth.

• design a scheme with a differentiated tariff,



Position: Proposal

Recommendations for feed-in tariffs:• calculate tariffs, based on the best (=most cost

effective) systems

• design a scheme that stimulates or forces prise reductions.

• consider net-metering



Position: Proposal

Examples of investment support instruments:• VAT reduction for PV systems

• a generic subsidy in Euro/Wp

• a tender subsidy for most cost efficient projects

• tax deduction possibilities for investments in PV (or other sustainable solutions)



Position: Proposal

Examples of investment support instruments:• tax credits, refunded to the applicant

independent of the tax bill

• reduction community or real estate tax

• refund of real estate costs, when acquired from the community


Position: Proposal

Aspects of investment support instruments:• VAT reduction:

- easy to implement- little to no administration- loss of state income (DE 2005: 500 MEuro)


Position: Proposal

Aspects of investment support instruments:• Euro / Wp subsidy:

- requires government budget- requires separate administration


Position: Proposal

Aspects of investment support instruments:• Tender:

- requires government budget- requires separate administration- more appropriate for demo - phase


Position: Proposal

Aspects of investment support instruments:• Tax deduction:

- easy to implement- little to no administration- loss of state income- income dependent


Position: Proposal

Aspects of investment support instruments:• Tax credits:

- easy to implement- little to no administration- loss of state income


Position: Proposal

Aspects of investment support instruments:• Real estate tax or cost reduction:

- difficult to implement- often under local government - large differences throughout the country


Action Plan: Objectives

2007:A broad support for a standard method to set up national support schemes for the acceleration of PV deployment

2008:Increased harmonisation of national support schemes for the acceleration of PV deployment


Action Plan: Targets

2007: • A support scheme recommended by the European Commission and

supported by the PV Policy Group, EPIA and the PV Technology Platform;

• A guideline describing how to set up an effective and controllable support scheme.

• A common and generally accepted calculation method for the determination of a feed-in tariff

• National position papers and action plans for setting up national support schemes for the acceleration of PV deployment


Action Plan: Targets

2008:• National support schemes based on the national position

papers and national action plans in the countries participating in the PV Policy Group

2010:• National support schemes based on the European position

paper and the European action plan in all EU member states


Action Plan: Steps

1. Tuning with WG1 (Policy and Instruments) and WG2 (Market) of the PV Technology Platform;

2. Tuning with the PV Technology Platform – Mirror Group;

3. Presentation for the PV Technology Platform; 4. Discussion wit the EC – TREN on the publication of a

Recommended approach for the support of market implementation of PV energy systems;


Action Plan: Steps

1. Formulation of a recommended support scheme;2. Organisation of a conference for high level

government officials, presenting and elucidating the recommended approach for the support of market implementation of PV energy systems;

3. formulation of national position papers and national action plans.


Action Plan: Budget

Action Hours Budget Formulation of support scheme 40 2400 Tuning with WG 1 and WG 2 of the PVTP 40 2400 Tuning with PVTP – Mirror Group 20 1200 Presentation for the PVTP 20 1200 Discussions with EC DG TREN 40 600 Preparation of the Recommended approach for support of an accelerated implementation of PV power systems

120 2400

Organisation of a high level conference on implementation of PV power systems

120 5000

Formulation of national position papers and action plans 800 -

european position paper and action plan

Documents

thematic wgfeed

tariff scheme

tariff best practices

tariff requirements

tariff cost

high tariff

tariff calculation

tariff values