Title: Finance Mechanisms and Incentives for Photovoltaic Technologies in Developing Countries
Publisher: Elsevier Publishing
Publication Year: 2012
JRC N°: JRC67639
ISBN: 9780080878720
URI: http://publications.jrc.ec.europa.eu/repository/handle/JRC67639
DOI: 10.1016/B978-0-0808-7872-0.00148-7
Type: Articles in periodicals and books
Abstract: Access to modern energy is a social and economic priority to rural population and policy-makers because of its direct socio economic and environmental benefits, as well as the indirect benefits of energy as an important input factor to growth and the Millennium Development Goals (MDGs). In this sense, renewable technologies offer the option to provide access to sustainable energy services and foster economic development. However, there are many barriers to the widespread diffusion of renewable energy technologies in the rural environment. One of the main barriers is financial, as many rural families have little expendable capital and lack access to credit. Therefore, schemes for financing off-grid electrification are just as important as technological innovations. This chapter reviews existing support mechanisms and incentives for off-grid photovoltaic (PV) deployment in developing countries, particularly combining market, energy use, and socio-economic elements. Additionally, it analyses the progress and adaptation of the support mechanisms depending on the degree of failure in the past, and suggest new solutions for promoting sustainable energy options for remote rural areas in developing countries. We must note that the schemes reviewed can be used to finance also other forms of renewable energy, as all renewable energy suffer from similar barriers – high initial cost and low operational cost in an environment where long term credit is difficult to acquire. PV projects are the focus of this chapter because there is more data about off-grid PV projects in developing countries than any other type of renewable energy technology.
JRC Directorate:Energy, Transport and Climate

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