Financial Return for Government Support Financial Return for Government Support of Large-Scale Thin-Film Solar Photovoltaic Manufacturing in Canada

Energy Policy, Vol. 38, pp. 4291–4303, 2010

44 Pages Posted: 23 Feb 2012 Last revised: 3 Mar 2012

See all articles by Kadra Branker

Kadra Branker

Queen's University

Joshua M. Pearce

Michigan Technological University; Aalto University

Date Written: 2010

Abstract

As the Ontario government has recognized that solar photovoltaic (PV) energy conversion is a solution to satisfying society's energy demands while reducing the adverse anthropogenic impacts on the global environment that compromise social welfare, they have begun to generate policy and funding programs to support financial incentives for PV. This paper (publication below) provides a financial analysis for investment in a 1 GW per year turnkey amorphous silicon PV manufacturing plant. The financial benefits for both the provincial and federal governments were quantified for: i) full construction subsidy, ii) construction subsidy and sale, iii) partially subsidize construction, iv) a publicly owned plant, v) loan guarantee for construction, and vi) an income tax holiday. Revenues for the governments are derived from: taxation (personal, corporate, and sales), sales of panels in Ontario, and saved health, environmental and economic costs associated with offsetting coal-fired electricity. Both governments enjoyed positive cash flows from these investments in less than 12 years and in many of the scenarios both governments earned well over 8% on investments from 100s of millions to $2.4 billion. The results showed that it is in the financial best interest of both the Ontario and Canadian federal governments to implement aggressive fiscal policy to support large-scale PV manufacturing.

Keywords: government incentives, photovoltaic, financing, solar energy, renewable energy, energy policy

JEL Classification: Q42, Q48

Suggested Citation

Branker, Kadra and Pearce, Joshua M., Financial Return for Government Support Financial Return for Government Support of Large-Scale Thin-Film Solar Photovoltaic Manufacturing in Canada (2010). Energy Policy, Vol. 38, pp. 4291–4303, 2010. Available at SSRN: https://ssrn.com/abstract=2010149 or http://dx.doi.org/10.2139/ssrn.2010149

Kadra Branker

Queen's University ( email )

Kingston, Ontario K7L 3N6
Canada

Joshua M. Pearce (Contact Author)

Michigan Technological University ( email )

Houghton, MI 49931
United States

HOME PAGE: http://www.mse.mtu.edu/~pearce/Index.html

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland

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