Several governments have enacted subsidies and incentives designed to encourage the development of renewable energy resources. Government subsidies and incentives generally focus on grid-connected systems and take several forms, including tariff subsidies, renewable portfolio standards, rebates, tax incentives and low interest loans.
Many countries and other local jurisdictions have established limits on carbon dioxide emissions (i.e., the Kyoto Protocol). The country, locality or companies within the jurisdiction are given carbon emission allowances, or “carbon credits”, which represent the right to emit a specific amount of carbon dioxide. If these limits are exceeded, that entity must purchase unused carbon credits from another entity. Thus, this adoption has spurred a market for trading of surplus carbon credits – a profitable scenario for those entities with reduced emissions due to renewable energy utilization.