The Impact of Subsidy Programs for Solar Thermal Applications: A Case Study for a Remote Island

Abstract

Government intervention in the form of financial incentives is crucial for translating customer choice into a larger market share for solar thermal applications. The lengthy subsidy programs for solar water heaters in Taiwan have expanded the local market. On a remote island (Kinmen County), the area of solar collectors that are installed per 1000 inhabitants is 192.9 square meters. This study investigates a market-driven mechanism in terms of disposable income, household structure, building type and financial viability. The dual subsidy programs appear to have distorted the local market. The cumulative energy savings for solar water heaters that are installed is misleading because the systems are over-designed and there is a high replacement rate (or shorter service period).

Keywords

• subsidy
• solar thermal
• renewable energy