Japan and Germany rank first and third in the world, respectively, in terms of installed photovoltaics (PV) capacity. Most of Japan's capacity has been installed through a residential buy-down program (supplemented, to some degree, with low-interest loans). Germany has used a number of approaches to stimulate PV development, including rebates, low-interest loans, and premium feed-in tariffs that combine a high incentive level and a mandatory purchase requirement by utilities. This case study briefly describes PV support programs in Japan and Germany. Innovative Features
- The fact that these two countries are currently among the world's largest PV markets is reason enough to take a closer look at their programmatic approaches.
- Both countries have a long track record (i.e., since the early 1990s) of offering a combination of PV support measures that are currently being implemented in the U.S., including capital cost buy-downs and low-interest loans.
- This history provides relevant insights into how such programs perform over periods longer than the few years of experience with such programs in the U.S.
Results Both Japan and Germany demonstrate that various combinations of low-interest loans and buy-down programs can work over extended periods.
- As of the end of 2000, nearly 320 MW of PV was installed in Japan, while Germany hosted more than 110 MW.
- While the specific mechanics of one of the major drivers of success in Germany – the Renewable Energy Sources Act (feed-in law) – may not be particularly applicable to clean energy funds in the U.S., the overwhelming success of the Act demonstrates that production-based support for PV can work if the per-kWh payment is high enough.
- In addition, Germany's 100,000 Solar Roofs Program demonstrates that loan programs for PV can be successful if the value proposition is otherwise sufficiently attractive (loans for nearly 130 MW of PV have been approved since January 1999).