One year after the relaunch of the tax credit scheme for solar thermal systems in February 2016 (Law 20.897), some preliminary figures show a small increase of Chile’s solar market. But although the subsidy for newbuilds will be in effect until 2020, industry representatives have not been particularly satisfied with the impact of the new legal framework. Their criticism was supported by the fact that the announced subsidy scheme for social housing projects and low-income families has yet to be implemented. The market has improved slightly, but is moving at only half throttle. The photo shows the Villa Verde houses in the coastal city of Constitución. Some of the units which are part of this housing project have a thermosiphon system installed on the roof.
Two years after the end of the tax credit scheme that was part of law 20.365, the Chilean parliament approved an extension of the support programme for solar thermal systems. Although it is good news for domestic solar system suppliers and installers, the approval process for the new incentive took one year longer than expected and many local companies are in critical condition after a prolonged downturn in the industry’s economic activity.
Ten months after the end of the tax credit scheme included in Law 20.365, the new government of President Michelle Bachelet in Chile has been taking steps to promote new solar thermal installations. The country’s installers and manufacturers are looking forward to seeing the amended law, which will reactivate a tax credit scheme for solar thermal systems in newly built residential homes (see the attached draft of the October law), come into effect on 1 January 2015.
Chile’s tax rebate scheme for the housing industry ended on 31 December 2013. Since then, Chile has not had any incentive scheme for solar water heaters and local system suppliers are facing a period of low demand. The photo shows Sebastián Piñera, the outgoing Chilean President, in the capital of Santiago on 12 December 2013 during the inauguration of two new blocks of social housing with solar water heaters on their roofs. It was one of the last projects realised by help of the tax credit scheme from the 2009 Law 20.365. Still, the election agenda of the new government also includes the approval of a new scheme similar to the just finished one.
If nothing is done about it, Chilean Law 20.365 – which includes tax rebates for solar thermal systems - will end on 31 December 2013. Despite the support scheme’s success, there has not been any news on continuing the rebate policy. The main national solar associations, ACESOL and ACERA, are lobbying to extend the tax credit scheme. Although the new law is written and only needs final approval from President Miguel Juan Sebastián Piñera, there has not yet been an official date set to approve it.
2010’s “Law 20.365” tax rebate has made Chile´s solar thermal market grow substantially over the last years. Until now, however, the government has not yet agreed on continuing the rebate after 2013. The law enables construction companies to deduct a certain share of their investment costs in a solar thermal system (including installation) from the down payments that the law requires on any tax declaration. Chile’s solar industry association ACESOL is lobbying to extend the tax rebate scheme, because the country´s solar thermal industry has already been affected: As the law applies to large-scale construction projects, which take a long time to plan and build, several developers have just decided to exclude solar water heaters from their construction projects.
Photo: Schüco International KG
German-Chilean cooperation in the field of solar energy: On 7 November 2010, the German Solar Energy Society (DGS) and the Chilean Solar Association ACESOL reached an agreement on reciprocal membership in Berlin. The cooperation contract was signed by ACESOL Honorary President Pablo Pastene (centre), DGS Secretary General Uwe Hartmann (right) and the Director of the DGS Regional Association of Berlin Brandenburg, Rainer E. Wüst (left). Photo: ACESOL