How can we efficiently implement Renewable energies?
Alternative energies have many advantages over conventional sources of energy. Despite these benefits, they often face challenges to entry in general energy markets. Some of these barriers include difficulties in commercializing alternative when there are already successful conventional sources; distortions in pricing structures because of uneven tax burdens on energy sources; market failure to recognize the positive externalities of renewable energies; and other market barriers like high transaction prices, and inadequate information and capital available to potential consumers.
Renewable sources of energy at this point, are often more expensive than conventional sources of energy, and so they can not compete effectively on the market.
Renewable sources of energy at this point, are often more expensive than conventional sources of energy, and so they can not compete effectively on the market.
Economic Mechanisms to level the playing field
Some government programs can make the prices associated with renewable energy sources more competitive with conventional sources. Here are some examples of common government implemented mechanisms...
Feed-In-Tariff Designed to encourage investment in renewable energies, feed-in-tariffs are a widespread mechanism that guarantees a certain level of price paid a to property owners, who own and utilize a renewable energy generating source such as household solar panels or small wind turbines and sell excess electricity to the grid. This mechanism is utilized to some extend in over 109 countries, and has been especially successful in the European Union.
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Tax Incentives Tax incentives include credits and deductions available to individuals and businesses who install renewable energy technologies. These credits/deductions are generally offered for a certain period of time after the installation of the technology, and can decrease the burden of initial investment costs.
For specific information about tax incentives available near you, check out this interactive map of the USA created by NC Clean Energy Technology Center, NC State University, and the US Department of Energy:
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Green Certificates Green Certificates, known as Renewable Energy Certificates or Credits in the USA, are tradable commodities representing the environmental benefits of the energy that is generated. A single certificate generally represents a Megawatt of electricity, but this varies depending on the specific certificate scheme. Green certificates allow consumers who don't have the opportunity to install their own renewable energy generating technologies to have an impact on how much green energy is used to power their home.
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This is an example of an advertisement from a California solar company that emphasizes the benefits available to consumers who are investing in solar energy systems. This particular policy does not have a limit to the amount of credit a consumer can receive, however the program has only been extended at this rate of credit to the end of 2019.
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