Aug 21, 2023

Government Incentives for Renewable Energy

Businesses are being offered many incentives to push them towards switching to renewable energy.

Government Incentives for Renewable Energy

Businesses are being offered many incentives to push themtowards switching to renewable energy. Here you can find all you need to know aboutgovernment incentives for renewable energy.

What are government incentives?

Government incentives are policy measures which are introduced by governments to encourage the development, adoption and utilisation of a particular asset or product. In this case, renewable energy is the product they want to incentivise.

These incentives aim to accelerate the transitions from more traditional energy sources such as fossil fuels to new renewable energy sources such as solar, wind and geothermal energy.

The purpose of these incentives is to reduce the carbon emissions produced by businesses across the world and help push us towards Net Zero. These incentives provide funding, support, and research and development (R&D) funding.

What government incentives are available for renewable energy?

There are many opportunities for funding from the government, including tax credits and feed-in tariffs. These incentives can offer funding for renewable energy sources such as solar energy and wind power, they also offer tax reductions, funding and research and development (R&D) funding.

  1. Tax Credits: The UK does not have a direct tax credit system for renewable energy installations for individuals. However, businesses can benefit from certain tax advantages, like the Annual Investment Allowance, for investing in energy-saving equipment.
  2. Feed-in Tariffs (FiTs): The UK introduced the FiT scheme in 2010, which paid producers of renewable electricity a set rate for the electricity they generated and any surplus they exported back to the grid. However, the FiT scheme closed to new applicants in March 2019.
  3. Net Metering: The UK doesn't have a net metering system per se. Instead, it had the FiT scheme, and now the Smart Export Guarantee (SEG) has replaced it. Under SEG, energy suppliers pay small-scale low-carbon generators for the electricity they export to the grid.
  4. Renewable Portfolio Standards (RPS) or Renewable Energy Standards (RES): The UK has the Renewables Obligation, which requires licensed electricity suppliers to source a portion of their electricity from eligible renewable sources.
  5. Green Certificates or Renewable Energy Certificates (RECs): In the UK, this system operates as the Renewables Obligation Certificates (ROCs). Electricity suppliers show they have sourced a certain percentage of their electricity from renewables by presenting these certificates.
  6. Research and Development (R&D) Funding: The UK government, through various agencies, provides funding for R&D in renewable energy technologies.
  7. Emissions Trading Systems or Carbon Pricing: The UK was part of the EU Emissions Trading System (ETS) and has now established the UK ETS, which sets a cap on greenhouse gas emissions from energy-intensive industries.

The Future of renewable energy incentives

The future of government incentives for renewable energy is influenced by a combination of global environmental concerns, technological advancements, economic considerations, and political will. While it's challenging to predict specific policy measures, several overarching trends and themes can be identified, such as an emphasis on energy storage, green hydrogen, infrastructure development and (R&D) funding.

How to get involved in these government incentives for renewable energy

Here you can look at which funding, and incentives are available to you, you can also look into more detail and see if you are eligible for these incentives.

Please note that many incentives have a life span, meaning they are not always available, you should research these incentives and make sure you understand the requirements and contents before applying.

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