Subsidy programs on diffusion of solar water heaters: Taiwan’s experience

• Published in: Energy policy 2011-02, Vol.39 (2), p.563-567
• Main Authors: Chang, Keh-Chin, Lin, Wei-Min, Lee, Tsong-Sheng, Chung, Kung-Ming
• Format: Article
• Language: English
• Subjects: Applied sciences; Diffusion; Economic data; economic incentives; Energy; Energy economics; Energy policy; Energy sector; Enlargement; Exact sciences and technology; General, economic and professional studies; Government subsidies; Governments; heaters; Heating; Incentives; industry; Market; Market analysis; Markets; Natural energy; Regional; sales; Solar energy; Solar water heater; Solar water heater Subsidy Market; Studies; Subsidies; Subsidy; Systems design; Taiwan; Technology transfer; Water; Water heaters; Water supply
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2010.10.021

Financial incentives are essentially one of the key factors influencing diffusion of solar water heaters in many countries. Two subsidy programs were initiated by the government of Taiwan in 1986 (1986–1991) and 2000 (2000–present), respectively. Those long-term national programs are considered to be the driving force on local market expansion. In 2008, the regional subsidy programs for solar water heaters were announced by Kaohsiung city and Kiemen county, which resulted in the growth in sales. A revised subsidy was also initiated by the government of Taiwan in 2009. The subsidy is 50% more. However, the tremendous enlargement of market size with a high-level ratio of subsidy over total installation cost might result in a negative impact on a sustainable SWH industry and long-term development of the local market, which is associated with system design and post-installation service. This paper aims to address the relative efficiency and pitfalls of those national and regional programs.