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In some markets, there is practically no project developing, likely owing to a combination of political, regulatory, financial, institutional and other barriers.

Tax Measures: A Complete Clean Energy Finance Guide

This resource—which is one of many instrument summaries offered by the Clean Energy Finance Solutions Center—provides in-depth information about tax measures, including best practices, case studies, design and implementation information, experts and training opportunities.

Loan Guarantees: A Complete Clean Energy Finance Guide

This resource—which is one of many instrument summaries offered by the Clean Energy Finance Solutions Center—provides in-depth information about loan guarantees, including best practices, case studies, design and implementation information, experts and training opportunities.

Green Banks: A Complete Clean Energy Finance Guide

This resource—which is one of many instrument summaries offered by the Clean Energy Finance Solutions Center—provides in-depth information about green banks, including best practices, case studies, design and implementation information, experts and training opportunities.

Feed-In Tariffs: A Complete Clean Energy Finance Guide

This resource—which is one of many instrument summaries offered by the Clean Energy Finance Solutions Center—provides in-depth information about feed-In tariffs, including best practices, case studies, design and implementation information, experts and training opportunities.

Bonds: A Complete Clean Energy Finance Guide

This resource—which is one of many instrument summaries offered by the Clean Energy Finance Solutions Center—provides in-depth information about bonds, including best practices, case studies, design and implementation information, experts and training opportunities.

Tax Measures

Tax measures provide an incentive for investment in renewable energy and energy efficiency technologies and measures. Governments around the world have implemented a variety of tax measures to support clean energy deployment (forthcoming Solutions Center Financial Incentives Policy Brief, Lantz et al. 2010, EPA 2015, seia.org). Common types of tax incentives include:

  • Corporate income tax incentives can be tax deductions or credits for on-site use of renewable energy or energy efficiency technologies or for large-scale renewable energy that is fed into the grid. In relation to renewable energy, corporate investment tax credits are based on initial cost of renewable energy systems, while production tax credits are based on actual energy produced. Production tax credits can be more effective in incentivizing maximization of energy production—a point that is true for all kW/cost-based incentives as compared to performance-based incentives.
  • Personal income tax incentives are tax deductions or credits, normally based on investment or cost of an renewable energy system or energy efficiency technology.
  • Property tax incentives are used when renewable energy systems (distributed or utility-scale) or energy efficiency technologies are implemented to improve a property. These incentives reduce the level of taxes associated with the property improvements (Barnes et al. 2013).
  • Sales, import and/or value-added tax (VAT) incentives lessen or eliminate sales or VAT taxes, or import duties, for energy efficiency and renewable energy technologies (applied at both the distributed and utility-scale levels) for individuals and/or businesses.
  • Accelerated depreciation quickens renewable energy fixed asset depreciation and thus, through reducing taxable income, defers tax liability in the early stages of renewable energy project development.

Tax incentives have been applied in various ways around the world and can be adapted to unique national circumstances. While tax incentives can be relatively simple and flexible instruments to support renewable energy and energy efficiency deployment, efficient monetization is a key design element, as tax-based incentives require a taxable liability to be utilized. It is also important to note that the use of tax measures by a project can limit the number of investors that can invest in energy projects and can therefore increase the cost of capital (CPI 2013).

Green Banks

Green banks are innovative public-private or quasi-public institutions supporting the provision of long-term and low-cost financing for clean energy projects (EPA 2015). Green banks are often designed to use seed capital from the public sector to leverage significant amounts of private investment for clean energy projects and to eventually operate under a self-sustaining business model. Green banks are often intended to support technologies or products for which traditional market lending is not yet in place. Thus, green banks can be positioned as a fairly middle-ground policy support for technologies that are not totally reliant on incentives or grant dollars and do offer some payback, but that still need some assistance securing financing.

An important feature of the bank is its nature as a revolving loan fund—distinct from grant-based products, as you get to use the same funding over and over to lend to more projects. Green bank products are normally designed to ensure financial returns to the bank that will allow the institution to be self-sustaining; for this reason, rebates and grants are not normally managed through green banks (EPA 2015, Kennan 2014). Financial incentive products and programs, such as concessional loans, loan guarantees and green bonds can be consolidated and managed under green banks. This allows for greater efficiency and reduced administration costs across the incentives (EPA 2015, Kennan 2014). Green banks can support a multiplier effect for public funds invested in clean energy through attracting significant private investment using minimal public seed capital (Kennan 2014; Lecacheur 2010).

Green banks are also empowered to explore innovative financing approaches. For example, green banks can implement financing mechanisms that may result in greater financial benefit for the private sector investing partner than for the green bank itself (EPA 2015; Kennan 2014). Another role of the banks is to help educate the lending community on emerging technologies. For example, they sometimes provide underwriting support or expertise for specific products to help the rest of the private sector be comfortable with lending for clean technologies. Green banks can be focused on business, consumers, or both.

Corporate Renewable Power Purchase Agreements: Scaling up Globally

A business case has been made for corporations to procure renewable energy, and Fortune 500 companies and others have set targets for procurement of renewable energy, energy efficiency and greenhouse gas emissions reduction. This report guides companies through the opportunities that power purchase agreements (PPAs) offer in relation to these targets. It also addresses the obstacles corporate buyers and developers face as they plan and negotiate PPAs, and the authors propose solutions for corporate buyers and developers.

Energy Efficiency Market Report 2015

The authors of this report evaluate the impact of energy efficiency in the energy system and assess the scale and outlook for further energy efficiency investment using detailed country-by-country energy efficiency indicator data and International Energy Agency (IEA) expertise.

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