Government policies continue to play a crucial role in accelerating the adoption and deployment of renewable energy technologies, particularly in sectors other than power generation. Policies also continue to be critical for achieving renewable energy cost reductions and innovation.1 By the end of 2020, nearly all countries worldwide had in place renewable energy support policies, although with varying degrees of ambition.2 (→See Figure 10 and Table 6.) In addition, renewable energy deployment continued to expand outside of government policies in the form of corporate commitments to renewables and utility-led activities. This was driven by market-based factors such as corporate action on climate change and the declining costs of renewable electricity.3 (→See Feature chapter.)
The year 2020 was critical for assessing progress on renewable energy targets. Worldwide, 165 countries had in place targets to increase uptake of renewables in various sectors by year’s end.4 Most of these targets were for the power sector, followed by targets for total final energy consumption, heating and cooling, and transport. However, success in actually being on track to meet the 2020 targets varied widely: overall, some 80 targets were achieved, while the majority (134) were not yet achieved according to the latest data available (ranging from 2017 to 2020). While some countries were close to achieving their targets, others were far from being on track. Moreover, as countries’ 2020 targets were coming to term at the end of the year, as many as 30 countries had not yet set new targets for future years (compared to 67 that had). Many of the achieved targets were for power, heating and cooling, and total final energy consumption, while very few were in the transport sector. (→ See Figure 11 and Reference Tables R3-R8 in GSR 2021 Data Pack i.)
Continuing a trend of the past decade – and despite the COVID-19 crisis – policy support for renewables generally remained strong throughout 2020. In some countries, economic recovery policies and funding packages related to the pandemic included explicit support for renewables, although, overall, far more support was allocated to fossil fuels.5 (→ See Sidebars 3 and 4.) While the global health and economic disruptions affected the suite of renewable energy policies implemented during the year, such measures also evolved in response to greater action on climate change, the falling costs of renewables, evolving grid and system integration demands, and the changing needs and realities of different jurisdictions.
In jurisdictions with high shares of installed renewable energy, decision makers typically focused policy development on ensuring that support for renewables was cost effective, and on the technical and market integration of renewables. (→ See Systems Integration section in this chapter.) In less-mature renewable energy markets and in some developing and emerging economies, policy efforts prioritised outcomes such as boosting renewable energy capacity and generation to meet demand, promoting energy security and providing increased access to energy.6 (→ See Distributed Renewables chapter.)
Policies to advance the production and use of renewables can be targeted at any and all end-use sectors, including buildings, industry, transport and electricity generation. Most renewable energy policy in 2020 continued to focus on a single sector, although at least five countries unveiled comprehensive climate change policies that included support for renewables across multiple sectors. Trade policy also continued to have an impact on the production, exchange and development of renewable energy products, as well as on the demand for renewables within specific countries.7 (→ See Box 4.)
A significant amount of renewable energy policy making continued to occur at the municipal level. However, this chapter covers mainly policy enacted at the regional, national and state/provincial levels of governance. Municipal policy is discussed in detail in the REN21 Renewables in Cities Global Status Reportii.
Sidebar 3. Renewable Energy in COVID-19 Stimulus Packages
BOX 4. Trade Policy, Local Content Requirements and Renewables
In 2020, several jurisdictions unveiled policies to stimulate the local production of renewable energy equipment. In Africa, Mali exempted equipment such as solar panels, wind turbine blades and pump turbines from paying value-added tax (VAT). Burkina Faso launched a Solar Cluster initiative to establish a domestic solar PV industry by offering long-term financial backing for solar PV projects and providing networking and training opportunities for the country’s solar industry. Uganda’s revised draft National Energy Policy committed to formulating innovative financing mechanisms for geothermal and solar PV through different financial interventions, including income tax deductions, exemptions from VAT and customs tax, and accelerated depreciation tax incentives.
India put forward an expedited manufacturing plan to incentivise domestic solar cell manufacturing capacity and planned to impose new tariffs of 40% on imports of solar modules and 25% on solar cells starting in April 2022. The Indian government also approved a “production-linked incentive” plan to enhance the country’s manufacturing capabilities and exports, including domestic high-efficiency solar PV module manufacturing and advanced chemistry cell batteries.
Turkey’s new regulations for solar panel imports (which require calculating the import duty on solar modules per kilogram rather than by square metre) are perceived to favour Turkish manufacturers of solar PV panels, as high-eﬀiciency modules generally are heavier than they were a few years ago. Saudi Arabia announced a plan to increase local content in domestic renewable energy industry chains.
Other jurisdictions eased import requirements for renewable energy equipment in 2020. The Brazilian government introduced a measure to remove a 12% levy for some solar equipment (modules, inverters and trackers). The government of Bangladesh added EUR 200 million (USD 246 million) during the year to its Green Transformation Fund, which offers loans for the import of “environmentally friendly” products and energy efficiency components from Europe. In Senegal, to accelerate the electrification of rural areas, the government exempted equipmenti for the production of solar PV power from the VAT.
iThe exempted products include solar panels, inverters, solar thermal collectors, batteries, solar lamp kits, solar water heaters and charge regulators. Packages comprising a battery, solar panel, and a lantern or a solar panel, a water pump and controller also are included among the VAT-exempted products.i
Source: See endnote 7 for this chapter.