RENEWABLES FOR HEATING AND COOLING

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RENEWABLES FOR HEATING AND COOLING ( renewables-for-heating-and-cooling )

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80 The MAP was not designed exclusively for solar thermal and no quota was established in terms of specific technologies. Most of the funding available, however, was allocated to solar thermal installations, in spite of the greater cost gap between solar thermal and conventional fossil-fuel based heating technologies than for biomass installations. This may be due, at least in part, to the strong establishment of the solar thermal market in Germany. The technology has been supported by successful awareness campaigns and has a strong industrial lobby. Therefore the visibility and the public preference for solar thermal may account for it receiving a significant proportion of MAP funding. Targets were not specified for the MAP. However, in 2002 a general target was set to double the amount of solar thermal in Germany, aiming for 10 million m2 of collectors installed by 2006 (ESTIF, 2006a). Homeowners, small and medium-sized businesses, municipalities, and other registered associations are eligible to apply for grants. Soft loans are available for solar thermal collectors. Over the course of the programme, the administrative processes have been streamlined and simplified such that an application for a subsidy may now be processed and authorized within 2-4 weeks. As part of this streamlining process the distinction between flat-plate and vacuum collectors was abandoned in 2001, thereby putting vacuum collectors at a disadvantage in terms of their share of the grant per total investment (Langniss and Seyboth, 2007). The German Federal Ministry for the Environment (BMU) is responsible for establishing the guidelines and stipulations of the MAP. Grants for solar thermal collectors are available through the German Federal Office of Economics and Export Control (BAFA) that is responsible for implementation. Grants provided on a €/m2 collector area basis supply averaged roughly 15% of investment and installation costs. A performance requirement for eligibility of a minimum annual heat yield of 525 kWh/m2 was introduced to ensure minimum technical standards, thereby excluding low performing solar thermal collectors. As a result, unglazed and plastic absorber collectors typically used for swimming pool heating were ineligible for funding (ESTIF, 2006a). The performance requirements were increased in 2004 to fulfil European Union State Aid regulations. Financing Much of the funding for the MAP originated from the revenues of Germany’s Eco-tax13. As this funding is from the public purse, financing levels must be approved by the German parliament each year as part of the federal government budget. When the programme began in 1999, an annual budget of €100 M was allocated for all supported technologies. The annual budget available for solar thermal installation grants fluctuated between €40 M and €110 M with €94 M provided in 2006. At the same time, the average level of support granted per installation decreased from €1588 in 2000 (16.1 % share of average investment costs) to €917 in 2006 (12.6% share of average investment costs). Most grants went to the installation of flat-plate collectors with vacuum tube collectors accounting for only 12% of the total supported collector area. Public funding totalled €588 M from 1999-2005, triggering a total investment of €4.7 billion (ZSW, 2006). Grant levels were increased in 2002, 2003, and 2005 (Table 8) primarily in an attempt to compensate for insufficient annual budgets, or to allow for higher grants per unit and therefore stronger support for market growth. Grant levels were decreased in 2001 due to insufficient available funding and in 2004 when decision-makers assumed that the support available under a successful incentive should be continuously reduced to reflect the development of the technology, thereby meeting the requirements of European State Aid regulations. The levels of MAP funding depend on the technology and plant size. In 2007 grants available ranged from €40/m2 to €70/m2 of solar installation. 13. The German EcoTax implemented in 1999 places a tax on conventional fuels for transport and electricity generation.

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