2010 was a milestone for solar power in Taiwan, as the Renewable Energy Development Act had finally passed in 2009 after seven years. The act provides that Tai-power must purchase electricity from renewable sources, while suppliers must apply to the Bureau of Energy of the Minstry of Economic Affairs for approval of their installations. However, many applicants encountered problems that left them unable to complete their installations by the end of 2010 and so made them ineligible for Taipower's 2010 feed-in tariff, harming their businesses.

So what happened?

As the cost of installing solar panels can be fairly high, the government has implemented policies in a similar vein to those in Germany, providing the ability for households and businesses that install panels to sell power generated back to Tai-power to feed into the national grid. In turn, when there isn't much sunlight and they generate less power, they will buy power from the grid to make up for the shortfall. Overall, this setup helps relieve them of some of the burden of installation and maintenance costs, as they ultimately pay off their installations and, after about a decade, start making "green profits."

Adding this "investment" element has helped make installing panels more enticing than before, when there were just 50% subsidies for installation. The act's passage quickly attracted investment from the public and from solar-related businesses, with some people rustling up funds for their own installation, some renting state-owned rooftops, and others working with communities. However, after these installations got underway, the government revised the feed-in tariff, saying the original NT$12.97 per kWh was too high and would encourage mercenary behavior by businesses. They also made a sudden change to the regulations covering such arrangements after the deals had been signed. Originally, the tariffs offered to installers were to be set at the value in place when their contracts with Taipower were signed, meaning those that started installations in 2010 would enjoy the 2010 feed-in tariff. Under the new terms, only those installations completed in 2010 would receive that tariff, leaving many applicants and installers in the lurch.

The Kaohsiung World Games Stadium has over 8,000 solar panels on its exterior, making it Taiwan's largest generator of solar power.

Life Lai, chairman of the Solar Power Generation System Association, explains that feed-in tariffs have been a serious issue. Under the contracts, the agreed prices stay in place for 20 years, so when the government changed the terms with barely a fortnight left in the year, installers still working on their installations were left unsure what prices they would get when the work was done. Their concerns were further exacerbated by having already bought the equipment on the assumption they would get the 2010 tariff, equipment that is getting cheaper by the year, meaning that if their installation was not complete by year-end, they would have paid more to receive the same price as their 2011 competitors.

This whole kerfuffle even left the Ping-tung County Government stuck between a rock and a hard place.

Originally Pingtung County Commissioner Tsao Chi-hung had proposed a plan to develop solar power capacity in Ping-tung in response to the floods that followed Typhoon Mo-ra-kot, which left fish farms in Lin-bian and Jia-dong unable to operate, as well as destroying local wax apple orchards. His idea was to use these now-abandoned farms and ponds as sites for solar power generation facilities-, the power from which could be sold back to the grid. As the farmers lacked the capital to set out on such a venture, the county government got the solar industry involved, organized rental agreements with landowners, and secured investment from entrepreneurs, asking them to shoulder the application and installation costs.

According to the plan, landowners would receive NT$6000 in rent per 970-square-meter plot in the first year while the facilities were being installed, and once power was being generated, would receive NT$40,000 a year from sales over the next 20 years. While this would be much lower than what they had made from farming milkfish and grouper, the land was already rendered all but useless by the disaster, so at least they would be making some kind of steady income from it.

After the central government changed the policy, though, many entrepreneurs dropped out of the plan. Tsao voiced his strong opposition to the decision, and so the central government drew up new, dedicated regulations that would provide support for landowners and entrepreneurs. The county once again sought out commercial support, and the plan has only just got back on track, with installation proceeding apace and a feed-in tariff of NT$7.32 per kWh for ground-mounted systems ex-pected once the facilities come online later this year.

Taiwan's path to developing solar en-ergy has been long and tortuous, unlike the rapid pace of progress abroad.

Germany, Japan, Spain, and the US are the most successful countries in this regard thus far. Germany has done particularly well despite its apparent natural disadvantage-it experiences a large amount of rainfall and a 2:1 ratio of cloudy daylight hours to sunny ones. Nonetheless, it now produces 50% of the world's total solar power, with installed capacity of 7.4 GW, accounting for 3% of its total electricity production. How did they pull this off?

Chen Yan-hao, a former associate research fellow at the National Applied Research Laboratories, notes in a research paper that the two main factors are the passing in 2000 of Germany's Renewable En-ergy Act and a plan to reach 100,000 rooftop installations.

The latter plan saw the government offer low-interest loans to those wanting to install solar panels, with no repayments due on the principal for the first two years. This meant people could use the -money from selling excess power to offset the cost of installation. This low barrier to entry, along with a fixed price offered under the Renewable Energy Act, led to a wave of solar panel installations sweeping Germany. Later the German government began offering differential incentives for grid-tied and standalone installations in order to guide the industry. They also began levying an "eco-tax" to change the way industry and the public use energy, and invested 90% of the money collected into renewables.

Germany's experience shows that although the initial installation cost of solar power is high, with government support and technical advances lowering the cost alongside a bridging of the gap between suppliers and consumers, this kind of model can create a mature and successful market. Their experience offers a valuable example for other countries to learn from.

Solar power generation makes use of the photovoltaic effect, where particular materials will generate an electrical current upon exposure to particular wavelengths of light present in sunlight. It is one of the few forms of renewable energy that can be set up in either concentrated or distributed form, while also generating no noise and being simple to maintain. Solar panels boast the additional advantages of a long lifespan of 30 years or more, and of being able to be made to virtually any shape or size. As a result, solar is particularly well suited to implementation in urban areas, where it can also help make up for possible shortfalls at peak consumption times.

However, it is also susceptible to variations in the amount of power generated as the intensity and angle of incidence of the sunlight change, and due to the blocking of sunlight by clouds or large buildings.

As technology improves, the "conversion rate" of solar cells-the percentage of sunlight converted to electricity-is also improving, so that the cost of generation will decrease. Currently, Taiwanese-produced monocrystalline silicon solar cells have reached a conversion rate of 19-20%, an admirable figure, while polycrystalline cells are at 16-18% and thin-film solar cells are at 10%.

In addition to improvements in conversion rate, the variety of options for solar power generation equipment has continued to grow in recent years. On buildings with sloped roofs, panels can be mounted flush to the roof, while panels on tilted frames can be set up on flat roofs, or even on the ground. Recent developments have led to panels that are integrated with the actual building materials and can replace, rather than augment, roofs, walls, or windows, saving on materials while also generating power.

When the Kaohsiung National Stadium was opened for the 2009 World Games, it became notable in part for being Taiwan's single largest generator of solar power. The stadium can seat 40,000 people, while its 20,000-square-meter roof-almost 70% of which is made up of over 8,000 solar panels-boasts an installed capacity of 1 MW, generating 1.1 MWh of electricity annually. When the stadium is hosting events, these panels can supply as much as 80% of its power needs, and when not, it is completely self-sufficient in terms of electricity.

With its solar panels designed and built by Delta Electronics, the stadium is the world's largest sports facility powered by renewable energy, a demonstration of how Taiwan leads the pack in terms of solar energy technology. The problem is the next step, promoting and developing the domestic market for that technology.

Life Lai of the Solar Power Generation System Association believes that Taiwan should now seriously promote the use of solar power in homes and communities. With about 5 million family houses and low-rise apartment buildings in Taiwan, along with urban tower blocks, there is no shortage of opportunities to install solar panels both on rooftops and on other outside surfaces, and industry is already developing panels that are integrated with glass or other building materials.

After last year's roller-coaster, says Lai, this year the wholesale feed-in tariff was set at NT$10.31 per kWh, but the relevant regulations were also amended so that only residential installations with a capacity of 10 kW or less would enjoy that price. For larger installations, the operators would have to submit competitive tenders, making those who offer bigger cuts likely to win. Businesses complain that this increases uncertainty (only after renting land and applying to join the grid can they even begin to submit tenders). By imposing such barriers, the government seems to be indicating that it fears that entrepreneurs may install too many solar panels; but this runs counter to its stated aim of promoting solar energy.

In the long term, as the cost of equipment falls, solar's potential should increase. For example, three years ago it cost over NT$300,000 to install a 1kW system, -while today the same equipment costs only NT$120,000. Britain's New Energy Finance has predicted that by 2020, solar power installation could cost as little as US$1.45 per watt, making it competitive with fossil fuels in places that receive sufficient sunlight.

Looking at this trend, Tai-nan City's new mayor Lai Ching-te has made a major policy focus of the area's significant sunshine, inviting former head of the Bureau of Energy Yeh Hui-ching to serve as planner for Tai-nan's "Solar City" project.

According to the Tai-nan City Economic Development Bureau's April announcement, the project will focus on 10 areas, including solar rooftops, solar communities, a green energy city, and agricultural greenhouses. Yeh explains that feed-in tariffs for homes with under 10 kW of installed capacity will be fixed, with no requirement for competitive tendering, and the initial focus will be on solar rooftops and solar communities, coupled with promotion of a financing model involving cooperation between the public, entrepreneurs, and banks. Installing more than 10 kW takes an investment of over NT$1 million and a protracted application process, and owners have to sell power back to the grid for 10 years before they see profits, making it a less than attractive proposition. That being so, the plan is for banks to make loans to entrepreneurs, who will handle the planning, application, installation and operation for the private investor, sharing the load three ways. For the first few years the bank will take the lion's share of the earnings from electricity sales until the equipment and installation costs have been amortized, from which point on the entrepreneur and citizen will enjoy more of the profits.

Yeh explains that the solar rooftops and solar communities elements are the "carrot" to the "green energy city" policy's "stick." The Economic Development Bureau has stated that three quarters of roofs in new community buildings must be slanted to allow the installation of solar panels, and if a new building's design includes a solar system, the government will permit a higher ratio of floor space to land area. With this plan, Tai-nan may be able to rival the Japanese city of -Ota's solar community, where virtually every home has panels.

Solar power is well suited to small-scale generation of renewable energy, and Taiwan not only has the edge in terms of production technology and sunlight hours, but also laws and incentives that are already in place. On top of this, such systems could provide energy during outages caused by emergencies like floods, landslides, and earthquakes, helping communities stand strong in the face of disaster. There is no reason for us to keep dragging our feet. The government currently expects that in 15 years, solar power systems in Taiwan benefiting from feed-in tariffs will have an installed capacity of 2500 MW. But this is just one third of Germany's current installed capacity. It's time to make a real effort!