Subsidies

What are subsidies

financial or non-financial support provided to businesses to help them increase production of a particular good or service

How many types of subsidies are there?

4

Feed in tariffs

Governments guarentee a fixed above market price for renewable energy producers

Capital Investment Grants / Subsidies

governments offer direct financial support to cover upfront costs of building renewable energy infrastructure (wind farms, solar plants, energy efficient buildings)

Tax incentives

Green companies are offered tax credits or deductions

Green Public Procurement / Government Purchase Guarantees

government purchase green technology or services (electric buses, solar-powered schools, or energy-efficient buildings)

benefits of subsidies

lets countries achieve climate goals

creates jobs in green sectors

lowers cost of companies investing in green tech

Increases national energy independence

drawbacks of subsidies

strain government budgets=> can lead to higher taxes;

traditional energy companies struggle to stay competitive;

costs of funding subsidies can be passed on to consumers