Tue, Dec 13, 2022 page8

• EDITORIAL: Feed-in tariffs must be reconsidered

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  The government should consider adjusting its feed-in tariff calculations for renewable energy installations for practical reasons, as companies are struggling to access scant green energy and Taiwan has lagged behind in installing solar panels and offshore wind turbines. Further delays could jeopardize the government’s goal of making green energy a key electricity supply source by 2025.

  In addition to meeting the country’s unprecedented overhaul of its energy policy, the government should step up efforts to encourage green energy deployments to align with local businesses’ steps to reduce carbon emissions and reach carbon neutrality.

  Local manufacturers are under pressure to cut emissions in line with customers’ requests. Adoption of green energy has become a subject that affects companies’ business and customer relations, rather than just being about fighting climate change.

  RE100 is a global initiative bringing together the world’s most influential businesses committed to 100 percent renewable electricity. There are 22 Taiwanese companies among the group’s more than 380 members, and about 100 of those members have operations in Taiwan, an RE100 global initiative report published on Thursday said.

  Renewable energy installations, solar and offshore wind in particular, have lagged behind the government’s plan due to labor shortages and surging raw material costs, from steel to aluminum. The New Taiwan dollar’s constant depreciation against the US dollar has added to soaring costs for solar panel installations. The COVID-19 pandemic also slowed the progress of solar energy installations.

  Only about 9.2 gigawatts in solar panel capacity have been installed this year, missing this year’s target of 11.35 gigawatts. It is possible that Taiwan might miss its annual solar energy installations target for the third year in a row. That means the nation is lagging behind its target of building 20 gigawatts of solar energy capacity by 2025. Combining other forms of renewable energy, the government aims to ensure green energy comprises 15 percent of the overall electricity supply by 2025.

  Earlier this month, the Bureau of Energy trimmed the feed-in tariffs for solar installations by 1 to 3 percent on an annual rate to an average of NT$4.40 per kilowatt-hour, the bureau’s preliminary plan said.

  Ground-mount solar panel developers took the hit from the latest feed-in tariff cuts, as the subsidy for those panels is to fall below NT$4 per kilowatt-hour. However, the subsidies for other renewable energy installations remain mostly unchanged.

  The government is following the global practice of gradually lowering feed-in tariffs to match declines in installation costs as the industry matures. However, the situation in Taiwan has become more complicated, as illegally imported solar panels were used in solar power systems this year, likely making up 23 percent of the total installations, some solar firms said. That has led to grave miscalculations about solar power installations costs.

  The preliminary subsidy plan has raised discontent among local solar companies, as solar panel installations have been rising significantly, squeezing their profitability. Lower feed-in tariffs would discourage the deployment of solar energy, as developers would not be able to make proper returns on investments. The subsidy program would also not reach the government’s original goal of nurturing the local renewable energy industry.

  To avoid such a no-win situation, some solar companies suggested that the Bureau of Energy raise feed-in tariffs by 2 to 3 percent for installations next year. The bureau should consider this advice during the next public hearing before making a final decision. Fair and thoughtful feed-in tariffs must constitute a part of the government’s broader plan to move toward zero carbon emissions by 2050.
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