1.4 Photovoltaic Incentive Programs/Funding News

The main factor driving growth in the world PV market continues to be the market incentive programs led by governments, utilities and aid agencies. During the last quarter, the following developments were reported.

1.4.1 Australia

People in remote areas of Australia will benefit from A$4.28 million in Commonwealth funding. As part of the move, the Howard Government has approved funding of A$3.5 million for Western Australia's Renewable Energy Water Pumping program. The funding will help people and businesses in remote parts of Western Australia replace their diesel-powered pumps with new solar and wind powered systems. The Commonwealth Government will provide up to half the cost of the renewable energy systems.

New generation pumps will be used to provide water for livestock and commercial horticulture projects as well as to help reduce salinity problems in some agricultural areas. The Commonwealth also announced funding of A$780,000 for the New South Wales Renewable Remote Power Generation Program. This program funds renewable energy installations greater than 10 kilowatts that displace diesel.

Businesses and other organizations with remote facilities will be able to use the funding to install wind turbines and solar panels to reduce their reliance on diesel generators for electricity supply. The funds will be used to provide up to half of the initial capital cost of renewable generating technologies installed in remote parts of NSW.

The funding has been provided through the Commonwealth's Renewable Remote Power Generation Program, which is managed by the Australian Greenhouse Office. Around two hundred million dollars in funding is available over five years to reduce reliance on diesel-based electricity through the installation of renewable energy. The program is being delivered through a cooperative approach between the Commonwealth Government and the States and is administered by the State energy agencies within each jurisdiction.

1.4.2 Bangladesh

The People's Republic of Bangladesh has applied for a US$ 191 million credit from the International Development Association (IDA) towards the cost of the Rural Electrification And Renewable Energy Development Project. The project includes rural electrification through off-grid options, chiefly solar home systems.

The project comes before the Review Board on Jun 25, 2002. Bangladesh's development objective is to increase rural electricity access to promote social development and economic growth.

The Government intends to achieve this objective through this project by:

(a) assisting the Rural Electrification Board to expand and intensify rural grids, improve the operational and financial performance of the rural electricity cooperatives (PBSs), and reduce power outages in the rural grid systems,

(b) facilitating development of mini-grids, owned and operated by the private sector or NGOs/community-based organizations in remote areas (Remote Area Power Supply Systems RAPSS), and

(c) promoting renewables, such as use of solar home systems in rural areas inappropriate for grid expansion and mini-hydro and wind-based projects where feasible. The five-year project will involve the installation of 70-80,000 solar home systems (valued at some $20 million) starting in 2002. It will follow a micro-finance model and will require significant growth in local product supply capability.

1.4.3 Cambodia

Primary objectives of the World Bank's Rural Electrification and Transmission Project in Cambodia are to reduce poverty and support the foundations for sustainable development in the long term.

The project will seek to accomplish these objectives by

(a) promoting rural development by providing the economic benefits of electricity; and

(b) improving power sector efficiency, by consolidating the sector restructuring efforts, reducing electricity costs and removing infrastructure bottlenecks.

The project will support: (a) institutional development and capacity building, (b) grid extension to rural areas by EDC, (c) off-grid electricity expansion and quality improvement of Rural Electricity Enterprises, (d) commercial investments in mini hydro projects and (e) solar home systems and improved used of batteries for household electricity supply.

It is expected that up to 100,000 new customers would receive electricity. The off-grid pilot projects are expected to constitute the basis for further initiatives to supply electricity to currently isolated population centers. The project was scheduled to come before the Project Board on Jun 4, 2002, but this has been delayed. No new date has been set.