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Unclear effects of support to solar power

Government support to solar power is based on reference material that lacks well-considered socio-economic analyses. Another form of support would probably have given more renewable electricity for the money, at least in the short term. The cost-effectiveness of the support in the long term is unclear and should be investigated, according to the Swedish NAO’s audit.

Solar panels on semi-detached houses.

Audit background

The Swedish National Audit Office has audited the total support to solar power on the basis of Sweden's energy and climate policy objectives. The audit analyses whether the reference material presented ahead of the Riksdag decision was adequate and transparent, in particular as regards socio-economic analyses.

The Government and the Riksdag have set several targets aimed at increasing the share of renewable energy in the Swedish energy system; the EU renewable energy objectives to 2030, Sweden’s renewable energy objectives to 2020 and the extension of the electricity certificate system to 2045. A majority of the Riksdag parties also support the Commission on Energy proposal that Sweden should have 100 per cent renewable electricity generation by 2040. The objectives do not, however, specify the type of renewable energy sources to be used. Solar power is one of several possible technologies for renewable electricity generation and may constitute a part of that generation.

Solar energy currently makes up 0.1 per cent of Swedish electricity generation. The Swedish Energy Agency’s proposed strategy for increased use of solar power estimates that to help achieve the target of 100 per cent renewable energy, solar power can increase to a level corresponding to between 5 and 10 per cent of total electricity consumption in Sweden in 2040.

Solar power generation has increased considerably in recent years, both globally and in Sweden. This is largely in connection with falling generation costs combined with targeted subsidies in many parts of the world. In addition, solar power is popular with the public, in part because it does not release greenhouse gases, other environmental pollution and is not noisy. A high proportion of solar power may, however, create major challenges in the power system, since it is variable, in other words it is not possible to control generation. In Sweden it is relatively costly, despite rapid technological development globally.

Swedish solar power generation is subject to a number of different subsidies, including investment support, electricity certificates and various tax subsidies. In total, the support to solar power generation was about SEK 800 million in the period 2009–2016. In the event of extensive development, the costs to central government for the support will be considerably higher.

Since solar power is relatively costly, the support per kWh generated is high, compared with the support to other renewable electricity generation, which is primarily subsidised via the electricity certificate system. The reason for the Swedish NAO’s audit was that the cost per kWh is high, while the system is complicated and obscure. Since an important point of departure for energy and climate objectives is that central government initiatives must be cost-effective, the purpose has been to investigate whether the support is cost-effective and the extent to which cost-effectiveness has been taken into account in the design.

Press contact: Olle Castelius, phone: +46 8-5171 40 04.

Presskontakt: , telefon: 08-5171 42 06.


Updated: 05 April 2018

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