Solar Financing, Subsidies and Incentives

Countries around the world offer incentives and tax breaks for investment in solar and renewable energies. This makes sense for a number of reasons.

It's a little-known fact that governments subsidize the petroleum industry. In the U.S., for example (according to sources), between 5 and 10 billion dollars a year of taxpayers' money goes to the petroleum industry. Less than 500 million a year goes to renewables.

Around the world, fossil fuels are more expensive. Governments recognize the finitude of oil reserves and their damage to the environment. They encourage consumers to switch to renewable energies that tap into free sources and do far less harm to the environment.

For example, in 1994, the government of Japan introduced incentives for solar energy. This program has resulted in a 72 percent reduction in the average cost of solar energy systems, due to the expanded market availability and increased efficiency of distribution. Solar energy is now competitive in Japan, and the need for incentives is being reduced.

Germany is following in the footsteps of Japan, using incentives to encourage the use and popularity of solar, and it hopes to rely solely on renewable energy sometime in the next 15 to 20 years.

Be Sure to Apply
Before You Buy.

For Canadian residents, the Canadian Solar Energy Industry Association provides a list of government incentives.

In the USA

American incentive programs are increasing. California's Million Solar Roofs initiative is the latest (as of 2005) of a number of solar energy tax breaks being legislated in the US.

You can read about state and local incentives on the DSIRE database.

Here is a list of Federal initiatives from the database (taken from dsireusa.org):
Corporate Depreciation: Modified Accelerated Cost-Recovery System (MACRS)
Corporate Exemption: Residential Energy Conservation Subsidy Exclusion (Corporate)
Corporate Tax Credit: Renewable Electricity Production Tax Credit
Solar and Geothermal Business Energy Tax Credit
Federal Grant Program: Renewable Energy Systems and Energy Efficiency Improvements Program
Tribal Energy Program Grant
Value-Added Producer Grant Program
Federal Loan Program Energy Efficient Mortgage (EEM)
Energy Star Financing and Mortgages
Tax-exempt Financing for Green Buildings, Renewable Energy & Brownfield Redevelopment
Personal Exemption: Residential Energy Conservation Subsidy Exclusion (Personal)
Production Incentive: Conservation Security Program (CSP) Production Incentive
Renewable Energy Production Incentive (REPI)
Green Power Purchasing/Aggregation: Federal Government - Green Power Purchasing Goal
Alternative Fuel Vehicle Incentives and Policies: U.S. Department of Energy's Clean Cities Program
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