An Assessment of Incentives Combination for Solar Energy Technologies-A Case Study for Chile

When solar energy technologies are compared to the conventional energy production alternatives, they may require incentives and financial support due to their relatively high investment costs and low bidding offers in electricity markets. Tax and cash incentives are able to diminish the gap between the levelized cost of electricity and the power purchasing agreements in most of the projects. The purpose of this paper is to research the effect of combining a number of tax and cash incentives under different financial structures and to find the best combinations of support mechanisms by considering maximum reduction of levelized cost of electricity and minimum government cost, applied to Chile as a case study.