Expanded incentives on alternative energy systems

In the first four months of this year, the Finance Ministry received 263 applications for a refund on solar water heating systems, which amounted to Lm23,950, the Parliamentary Secretary at the Finance Ministry, Tonio Fenech, said.

The figures were a clear indication that more families were being attracted to the government's incentives to use energy-saving schemes, he said.

Last year, the ministry processed 358 applications - a total refund of Lm17,650 - for investment in solar water heating systems, taking the number of families that are adopting energy-saving schemes up to over 600 since the incentives were introduced in the 2004 and 2005 budgets.

Mr Fenech said the two schemes were introduced because of the ever more "alarming" impact of oil prices on a small country like Malta, which had to face "double pressure": the island does not only depend on energy to generate electricity, but converts seawater into potable water.

Conscious of the effect of the fuel surcharge, the government has extended and expanded on the solar water heating system initiative, increasing the refund from 15 per cent to 25 per cent to a maximum of Lm100 as opposed to Lm50.

A solar water heating system costs around Lm650, and the family investing in one would be given Lm100 back, apart from savings on consumption.

It has been calculated that savings would amount to Lm53 for the first year, Lm62 in the fifth and Lm75 in the 10th, meaning a family would save Lm633 in the space of 10 years.

This initiative has been extended to wind energy systems as well as insulation systems for the conservation of energy on the roofs of private houses, Mr Fenech said.

As regards photovoltaic systems in private homes - the generation of energy from the sun - these could easily be connected to the national grid, helping the country to cover some of the peak demand of electricity during the day.

Households could benefit from lower electricity bills by installing such a system. Domestic consumers investing in a photovoltaic system would benefit from a 20 per cent refund to a maximum of Lm500 for the first kilowatt peak installed, and to a maximum of Lm250 for every kWp up to 3.7 kWp.

Moreover, Enemalta would be changing the meter that is necessary for the system free of charge, saving the consumer another Lm20.

The electricity generated through this system, which was not used by the households, would be sold to Enemalta, introducing what is known as net metering.

This meant that the electricity sold to Enemalta would be deducted from the consumption of units that it buys. Households would get a bill of the difference between the two readings - the units that are bought and those sold.

It was still being discussed whether the net metering system would be extended to the commercial sector, he said.

In the unlikely case that a family generates more units from its photovoltaic system than it consumes, the surplus would be sold to Enemalta at 3c a unit.

Mr Fenech pointed out that no Malta Environment and Planning Authority permit was required for such an installation as long as it was carried out according to stipulated guidelines. The National Resources Authority would, however, have to be notified.

Mr Fenech maintained that solar water heating systems were affordable to the majority of families, who were used to having TV systems, air conditioners and other hi-tech appliances in their homes.

He maintained that families would take on the government's incentives and invest in such systems if they understood that the pay-back period was short and that they would recuperate their investment and start benefiting from it in a matter of about three years, particularly in view of increasing oil prices.

"The more we reduce the demand to buy oil and our dependence on it, the better for the entire country and the economy," Mr Fenech said.

Asked whether the surcharge was likely to increase at the end of the month, he said the trends showed a constant increase, week by week, but he was not in a position to give any indications at this stage.