Governments can provide direct funding for research and development of renewable energy technologies. This includes funding for basic science research at universities and national laboratories that advances technologies like solar, wind, geothermal, tidal/wave, and other renewable sources. Long-term, sustained funding is important to support innovative research that will develop newer, more efficient, and lower cost technologies. Some key research areas could include new battery technologies for energy storage, advanced solar cell materials, larger and more efficient wind turbines, and methods for renewable energy integration and grid modernization.
Governments can offer tax credits and incentives to businesses conducting renewable energy research and development. This includes tax credits for eligible research and development costs incurred by companies. It also includes investment tax credits that allow companies to deduct a percentage of their investment in renewable energy property from their taxes. These types of tax policies help motivate private sector investment in advancing renewable technologies.
Loan guarantee programs are another policy tool to support renewable technology development. Governments provide loan guarantees for demonstration and deployment-scale projects that help companies secure better financing terms as they work to commercialize newer technologies. Many innovative renewable projects face challenges securing financing due to perceived technology risks, so loan guarantees can help overcome this obstacle. Some countries have created very large loan guarantee programs specifically focused on renewables.
Governments implement various policies to incentivize the deployment and adoption of existing renewable technologies at commercial-scale and in end-use applications. This includes Renewable Portfolio Standards which require electricity providers to source a certain percentage of power from renewable sources by a certain date. Feed-in tariffs also drive renewable adoption by offering long-term power purchase agreements and guaranteed prices paid per unit of renewable electricity generated, providing market stability and investment predictability. Renewable energy certificates and net metering programs also incentivize renewable deployment.
At the consumer level, governments establish tax credits for individuals who install certain renewable energy systems, such as solar water heaters or solar PV panels on homes and businesses. Property Assessed Clean Energy (PACE) programs also allow property owners to fund renewable upgrades through long-term financing repaid as an assessment on their property taxes. Rebate and cash incentive programs further reduce the upfront costs of renewable technologies for homeowners and building owners.
Governments implement renewable portfolio standards and clean energy standards that require utilities and electricity providers to generate or procure a certain minimum amount of electricity from renewable sources, such as solar and wind power, by a future date. This creates long-term guaranteed demand for renewable energy and drives new investment in large-scale projects. Some jurisdictions have established even more ambitious 100% clean energy or carbon-free electricity goals and mandates.
In the transportation sector, governments establish low carbon fuel standards that require the fuel mix supplied to vehicles to meet certain limits on carbon or renewable content over time. Standards that progressively increase the required renewable or low-carbon content year over year help grow markets for biofuels, renewable natural gas, hydrogen, and other clean alternatives. Tax credits and other incentives also make electric vehicles more affordable and encourage the adoption of electric buses and vehicles.
For building codes and standards, governments implement policies that promote renewable-ready building design and construction. This includes things like mandating that all new buildings include renewable-compatible components like solar-ready roof design or provisions for electric vehicle charging infrastructure. Governments can also establish efficiency performance standards that indirectly advance the deployment of renewable building technologies by reducing overall energy needs.
Strategic international cooperation and investment programs are another tool. Joint clean energy technology development partnerships and financing mechanisms between governments help accelerate innovation. International financing platforms that mobilize public and private capital for large-scale renewable deployment in developing nations are also important to promote global diffusion of clean technologies.
A mix of market-pull policies like renewable energy standards, technology-push policies like R&D funding, financial incentives, and enabling policies around infrastructure, codes, and cooperation can strategically and comprehensively support renewable energy progress. Long-term policy certainty and coordination across multiple levels of government are also vital to provide consistent and scalable support for the transition to renewable energy systems. When developed and enacted prudently through all levels of government, policies hold immense potential to transform energy systems worldwide.