Energy Saving Measures Financing Mechanisms

Analysis of foreign experience as regards application of energy-saving and energy efficiency measures financing mechanisms offers the following conclusions to be made:

  • Different taxation schemes are used to combat inefficient or excessive energy consumption, which schemes increase the relative cost of energy inputs or decrease the relative cost of new technologies applied.
  • Financial incentives are used to encourage the implementation of energy saving policy by increasing the economic attractiveness of corresponding investments and procurements, or by reducing operating costs. The funds raised from imposed taxes and duties make up sources of lax credits and subsidies.
  • Financial incentives are used in comprehensive programs that unite the interests of state agencies, the population and the business community, and function as profit distribution instruments taking into consideration energy efficiency level.

Taking into account the actual state of the Ukrainian economy, the primary measures as regards introduction of economic energy efficiency mechanisms are:

  • to establish progressive standards for energy content per unit of output in accordance with legally established procedure;
  • to impose economic sanctions for ineffective use of energy resources (increased payments, taxes, fines);
  • to increase administrative responsibility for offences in the field of energy saving and energy efficiency.

After the above problems have been solved, economic incentives can be used making credits less expensive, tax exemptions with regard to the part of profit obtained due to introduction of energy efficient and energy saving technologies.

The major fund raising sources for the economic incentives promoting programs, projects and measures dealing with energy efficiency and energy saving enhancement are:

  • State and local budget funds obtained from imposed taxes, penalties and increased payments for energy resources;
  • companies' own funds;
  • credit resources;
  • internal and external investments