Assessment of the feed-in tariff mechanism for renewable energies in Taiwan

Due to Taiwan's lack of natural resources, dependence on imported energy, and pursuit of sustainable development, renewable energies are extremely important for Taiwan's future energy supply. Since Taiwan's feed-in tariff (FIT) is still in its initial stage, one must examine whether the current system is compatible with a well-designed FIT scheme. This study examines the main features of Taiwan's FIT system and assesses design options using several criteria. Additionally, one of the most important elements of a FIT scheme, namely, a tariff system, is discussed. Taiwan's FIT scheme has the design options required by well-functioning FITs, and the guaranteed-return tariff system coincides with the spirit underlying leading global FITs; however, many issues, such as setting goals by stages, refinement of the tariff calculation methodology, and elimination of other non-economic barriers, must be addressed to achieve future developmental goals and green industry growth.

► No in-depth study has focused exclusively on Taiwan's FIT design options.
► This study fills this gap in the literature by examining Taiwan's FIT system.
► Assessments demonstrate that Taiwan's FIT scheme has the design options required by well-functioning FITs.
► Four issues are identified that Taiwan's policy makers should address to achieve future developmental goals and expand green industries.