In a significant move to bolster sustainable energy, the Department of Energy announced a restructuring of renewable energy subsidies last week. The new policy, effective January 2026, prioritises solar and wind projects in underserved regions, aiming to bridge the energy access gap. Subsidies for large-scale hydroelectric projects have been scaled back, citing environmental concerns raised by local communities.
The decision follows a year-long review involving stakeholders from the energy sector, environmental groups, and regional governments. Key changes include:
- Increased funding for small-scale solar installations, with a 20% boost in tax credits for projects under 5 MW.
- Geographic targeting, directs 40% of subsidies to rural and low-income areas.
- Phase-out of coal plant conversion incentives, redirecting funds to grid modernisation.
Critics argue the policy could strain urban energy markets, where demand is highest. Supporters, however, see it as a bold step toward an equitable energy transition. The policy’s impact will be closely monitored as implementation begins.
Stay tuned to PolicyPulse for updates on this and other governmental decisions shaping our future.
