Investment subsidies for measures increasing energy efficiency

Priority for new energy-saving technology

The main focus of MTI energy subsidies is in commissioning of new technology promoting energy-saving and renewable energy sources. However, under certain conditions, enterprises and communities participating in energy conservation agreements may receive investment subsidies for energy conservation measures within the scope of MTI’s available funds also for customary energy-saving technology projects. In order to qualify for subsidy, the investments must be quantified in reported energy audits, analyses or other comparable investigations.

The subsidy rate of customary conservation investments since 2002 has been 15-20% at most. Before the year 2002, the maximum subsidy was 10%. The minimum size of projects qualifying for subsidy is 25,000 euros and the maximum subsidy for one company is usually 150,000 euros per annum. Smaller savings investments may be combined so that the above minimum project size is fulfilled.

Priority in subsidising customary energy-saving measures is given to projects that conserve electricity. Subsidies for power conservation are considered only if the concurrent energy saving is significant or reduction of emissions is otherwise notable. Subsidies are not granted for alternative heating methods, except in cases where the upgrade is for renewable energy sources.

Subsidies are granted for investments with a repayment term excluding interest exceeding 2 years. As with audit subsidies, applications for investment subsidies must always be submitted before the project is started.
In line with the current Energy and Climate Strategy, subsidies are available for the emissions trading sector for new technology projects and experimental projects. Other sectors may apply for subsidies assessed on a case-by-case basis also for customary energy-saving technology projects.

Clear rise in investment subsidy in 2006

In 2006, a total of 6.6 million euros was awarded as investment subsidies to 44 projects in total. The amount of subsidy was more than three times that of the previous year, and considerably higher than the annual average across the whole Agreement Scheme 1998-2006.

The majority of the subsidised projects were in industry. Several projects were also initiated in the municipal and power plant sectors. Almost 60% of the launched projects were in industry, slightly under a quarter in the municipal sector, and less than a fifth in the power plant sector. Of all subsidies granted, the share of industry was over 70% and that of the power plant sector almost a quarter, leaving less than five percent as the investment subsidy share of the service sector. The subsidy awarded to two industrial and one power plant sector projects in 2006 accounted for almost two thirds of the total investment subsidies granted in 2006.

Since the agreements were signed, total subsidies of about 23.1 million euros have been awarded to 252 projects. Table shows the distribution of projects and subsidies across different agreement sectors in more detail:

Investment Subsidies Granded by the MTI Associated with Energy Conservation Agreements2006 (xls) (15.5 KB)

Share of industrial projects prominent throughout the agreement term

Of the total investment subsidies granted between 1998-2006 for energy conservation measures, 23.1 million euros, the share of industry has clearly been the greatest. Of total subsidies, the share of industry has been 62%, that of the power plant sector 27%, the municipal sector 6%, district heating sector 4% and property and building sector a good one percent.

Also measured by the number of investment projects, the proportion of industrial projects initiated in the conservation agreement term 1998-2006 has been significantly greater than that of other agreement sectors. The share of industry of the total number of subsidised investment projects during the whole agreement term was over 60%, and that of the municipal sector almost 25%. The share of projects signed up to the power plant sector agreement has been under 8%, and those of both the district heating sector and property and building sector somewhat under 4%.