The Ministry of Economic Affairs last week kept most renewable energy feed-in tariffs (FIT) for this year unchanged and eased cuts to solar energy subsidies, highlighting the government’s determination to catch up after delays in solar panel installations amid rampant bribery scandals.
The adjustments in solar energy tariffs have been in the spotlight, as solar is one of the most widely adopted renewable energy technologies in Taiwan, compared with geothermal, marine energy, and biomass and waste-to-energy.
In addition, a series of scandals surrounding the bidding process and protests by local farmers over the past two years have raised the question of whether it is time to review solar subsidies. Some radical thinkers even called for the government to cut its support.
As the government is committed to its energy transformation policy and net zero carbon emissions by 2050, no hasty actions should be undertaken. The government’s latest FIT arrangements for solar are agreeable, as they extend to small and micro-scale rooftop installations. To encourage such installations, the ministry trimmed a mere 2.1 percent for systems with capacity of 10 to 20 kilowatts, eschewing the 6 percent cut its pricing formula mandated.
It kept the tariff rate for small-scale rooftop systems, those with less than 10 kilowatts of capacity, at NT$5.7055 (US$0.17) per kilowatt-hour to incentivize households to adopt sustainable energy systems.
The ministry’s actions are in line with new subsidies approved early last month of up to NT$300,000 for household installations as part of the central government’s efforts to stimulate demand. The project is expected to lead to NT$72 billion in additional solar investments and would benefit about 120,000 households.
Meanwhile, the FIT for ground-mounted solar projects are to be cut the most, at more than 5 percent, amid dwindling demand and their unpopularity among local farmers.
The new subsidy scheme is comprehensive, as usable land is so scarce in Taiwan. It takes a lot of effort to persuade land owners to participate in large-scale solar projects, even if they have land that is underutilized or even fallow. People also fear their property being devalued if ground-mounted solar systems are built near it.
When the data from last year are compiled, they are expected to show that overall installations plummeted more than 30 percent to 1.8 gigahertz from 2023, as local governments have become hesitant to grant construction permits for new projects after multiple cases of officials being found guilty of accepting bribes in exchange for bidding information.
Taiwan had about 12.8 gigawatts of installed solar capacity, according to 2023’s data, so 3.6 gigawatts is needed from last year and this year to hit the goal of 20 gigawatts in 2026.
The inertia at the local government level was unexpected, as most solar companies were eyeing a recovery from a 2023 slump after the Democratic Progressive Party won last year’s presidential election. A slowdown was unsurprising while the political landscape was being decided, as some of the presidential candidates had expressed doubts about the government’s renewable energy policy.
The latest renewable energy subsidies are just a small step in shaping Taiwan’s energy policy. More drastic measures and collaboration from all parties are required to reach the goal of boosting the contribution of green energy to 30 percent by 2030.
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