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Solar Thermal policy in the Netherlands

General
The new Dutch renewable energy support scheme, SDE, has been operational since April 2008. Per category, the SDE sets a fixed reference price based on the average production costs, given the duration of the subsidy. The actual feed-in premium varies as a result of annually determined correction values that correspond to the possible revenues of electricity sales on the market. In other words, the annual SDE feed-in premium would be equal to the fixed reference price minus the yearly set correction value. This is the major difference between SDE and MEP, the previous Dutch feed-in support scheme, as the latter was based on a fixed feed-in premium. Another important difference between these two support schemes is the definition of an annual subsidy ceiling for new projects per category.

As of September 2008, a new financial support scheme is in operation: the programme 'Duurzame warmte' (sustainable heat), announced by the Ministry of Economic Affairs in June 2008.  The objective of this subsidy scheme is to stimulate the installation of solar water heaters, heat pumps, and micro-CHP in approximately 70,000 households. The scheme applies to existing dwellings only (built before 1 January 2008) and targets private owners and social housing associations. In the period up to 31 December 2011 a total budget of  M€ 66 is available.

According to the Directive 2009/28/EC of the European Parliament and of the Council on the promotion of the use of energy from renewable sources the target for the share of energy from renewable sources in gross final consumption of energy in the year 2020 for the Netherlands is 14% (in the year 2005 the share was 2.4%). The Directive has a mandatory 10 % target for transport to be achieved by all Member States, which refers to renewable sources as a whole, not biofuels alone.

Renewable energy projections according to the National Renewable Energy Action Plan for the Netherlands

The National Renewable Energy Action Plan (NREAP) for the Netherlands was submitted in July 2010. The target according to Annex I of Directive 2009/28/EC is 14% for the year 2020 and the projected NREAP share in that year is 14.5%.  According to the projection, the most important contribution in the year 2020 is expected from wind power (32.4 TWh or 2787 ktoe, 38% of all renewable energy). Second important contribution is expected from biomass (renewable heating and cooling) (1520 ktoe, 21% of all renewable energy). The third largest contribution is from biomass (renewable electricity) (16.6 TWh or 1431 ktoe, 19% of all renewable energy). Wind power contributes with 11.2 GW (32.4 TWh) in the year 2020 (onshore wind 6.0 GW and 13.4 TWh, offshore wind 5.2 GW and 19.0 TWh). For solar photovoltaic the 2020 contribution is projected to be 0.7 GW (0.6 TWh). For solar thermal the 2020 contribution is projected to be 23 ktoe. The two most important biofuels are projected to contribute 552 ktoe (biodiesel) and 282 ktoe (bioethanol / bio-ETBE) by 2020. The renewable electricity production from solid biomass amounts to 12.0 TWh (1030 ktoe) and for biogas it is expected to be 4.7 TWh (401 ktoe). The consumption of renewable heat is expected to amount to 650 ktoe for solid biomass and 288 ktoe for biogas. A contribution of 582 ktoe is expected from bio-methane for grid feed-in by the year 2020.

Renewable heating and cooling policy: solar thermal
In April 2011 it was announced that government savings resulted in a discontinuation of the programme 'Duurzame warmte' (sustainable heat): the budget reserved for 2011 would not be released by the Ministry of EL&I. So far, €40 million had been paid out up to 2010; the remaining € 20 million will not be paid out.

After the abolishment of subsidies for solar heating equipment in the Netherlands in 2003 (the EPR scheme) a period of five years without specific funding began. As of September 2008, a new financial support scheme is in operation: the programme 'Duurzame warmte' (sustainable heat), announced by the Ministry of Economic Affairs in June 2008 and discontinued in 2011 (see above).  The objective of this subsidy scheme is to stimulate the installation of solar boilers, heat pumps, and micro-chps in circa 70,000 households. The scheme applies to existing dwellings only (built before 1 January 2008) and targets private owners and social housing associations. In the period up to 31 December 2011 a total budget of  M€ 66 would be available to be used in existing dwellings, allocated as follows per category:
Based on the above-mentioned subsidie allocation budget would be available for:
In 2008 and 2009 the following budgets are available:
Concerning solar boilers the grant has been determined at 200 euro per GJ for boilers with a solar collector surface smaller than 6 m2, and 180 euro per GJ for larger boilers. Most private owners have a boiler with annual yield of 3.6 GJ, receiving 720 euro as subsidy. Systems eligible for the scheme should meet national standards according to NEN-EN 12975/12976.

Other, non-specific measures in the Netherlands have still been in place over several years. Generic funding has been in place through an income tax deduction in case of a mortgage: if the costs of the solar system are included in the total price of a dwelling, this results in a tax advantage. The latter mechanism is still operational. Also related to the mortgage, is the 'groene hypotheek' (green mortgage), which under conditions can provide additional loan at an interest rate that is generally 1% or 2% lower than the average rate. In addition there is funding available from some provinces for private households.

The Energy Investment Allowance (EIA) programme is also offering grants to commercial players. EIA is a tax relief that gives a direct financial advantage to Dutch companies that invest in energy-saving equipment and sustainable energy (including solar boilers, collectors or panels in a residence). A share of 44% of the annual investment costs of such equipment are deductible from the fiscal profit over the calendar year in which the equipment was procured, subject to a maximum of EUR 110 million. Besides, green funds & loans (tax reduction combined with loan) are also applicable to solar thermal energy. Investments in renewable energy sourced heat systems of up to 54,223 € / year (cap in 2008), are exempted from wealth tax (capital gains tax and property tax, regular rate: 1.2%) and eligible for a reduction in income tax of 1.3% of the amount of investments.

Future programme changes expected
No programme changes known.

Sources
http://www.senternovem.nl/duurzamewarmte (sourced April 2009)

http://www.milieucentraal.nl/pagina?onderwerp=Subsidie zonneboiler (sourced April 2009)

Dutch Ministry of Economic Affairs: Regeling aanwijzing categorieën duurzame energieproductie 2008. Staatscourant (nr. 44 / pag. 8), 3 maart 2008

The National Renewable Energy Action Plans (NREAPs) are all published on the Transparency Platform on Renewable Energy: http://ec.europa.eu/energy/renewables/transparency_platform/action_plan_en.htm (sourced July - December 2010)

Renewable Energy Projections as Published in the National Renewable Energy Action Plans of the European Member States, http://www.ecn.nl/nreap (sourced December 2010)


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