Global Challenges to Sustainable Renewable Energy Expansion: The Funding and Incentives Structures

Abstract

The main barriers to expanding renewable energy (RE) globally have been insufficient financing and incentives. It will take dynamic strategies to make up for this deficit. Examining the impact of financing and incentives on regional, national, and global RE, technological advances, and policies by private and public actors is the focus of this work. Certain search terms were used across five academic databases from 2007 to 2022 and screened articles, reports, and editorials, where 82 publications were obtained for analysis. With 1,200 GW of installed solar, wind, hydroelectric, and biofuel capacity, China is noted to be leading the world. The RE installations were sparked by major shifts in private financing, incentives, policies, and targets such as the removal of import and value-added taxes. The 2017 launch of the energy code in India helped build solar and biofuel systems up to 100 GW. From 2010–2019, many nations adopted auctions, Fit-in tariff/premiums, renewal portfolio standards, and power purchase agreements, which aided the development of RE. Insufficient funding by public and private investments caused solar and wind energy to decline between 2010 and 2015, which may be related to price effectiveness. A significant rise for solar in 2016 and for wind in 2019 was noticed when funds were provided. The analysis proposes that YieldCos which operates RE assets be created/used to consistently provide funds to expand RE technologies and installations. Crowdfunding can be established to offer alternative sources of finance for small-scale RE projects. Also, green bonds and banks are feasible fiscal instruments with good policies that can be used to generate sustainable funding for RE development. The appraisal of the fit-in tariff, as well as the intensification of tax breaks, green certificates, metering, and subsidies, are essential incentives that can help encourage RE expansion.