Taiwan Unveils New Goals for Renewable Energy Installation Capacity

The Executive Yuan, Taiwan's Cabinet, recently unveiled the new installation capacity goals for the island's renewable energies, which are set at 6,388 megawatts for 2020, 8,968 megawatts for 2025 and 10,858 megawatts for 2030, to account for at least 5% of the total energies used to generate the island's electric power beginning 2020.

Primary incentive for boosting the island's renewable-energy industry is feed-in tariff (FIT), a procurement payment offered by the government to private providers of renewable power. The FIT rate averages NT$10 per kilowatt, which is 2~4 times higher than grid power and around 20-25% higher than the rate offered by German government. In 2010, the government is expected to spend US$49 million on FIT.

However, the government will not buy the renewable power generated by installations larger than the set 500 kilowatt ceiling. At the same time, it continues to subsidize solar photovoltaic (PV) system installations, mainly built-in photovoltaic (BIPV), on public buildings. Such limit for procurement volume is interpreted by the solar industry an action to suppress the development of the industry.

With the expectation of higher solar cells efficiency in the near future, the government set the new goals to extend the sudden booming domestic solar power installation projects to a longer timeframe for better cost performance.

My observation to the 500 kilowatt buy-back limit is that the government set this ceiling to avoid the establishment of any new power plants from taking advantage of the high FIT. It will also set an unfriendly domestic market to force the Taiwan solar PV companies to concentrate on overseas markets.