Dynamic simulation of government subsidy policy effects on solar water heaters installation in Taiwan

Because of the increasing shortage of international energy sources and greater climate change related to global warming, developing renewable energy sources has been emphasized by numerous countries. Solar energy provides a type of clean and non-polluting renewable energy source and contributes greatly to relieving the energy and environment crises. In response to the international increase in energy prices, and under environmental pressure to reduce global emissions of greenhouse gasses, promoting solar water heaters (SWHs) has become a crucial aspect of the Taiwanese government's energy saving policies. This study used system dynamics to explore the causal relationship of solar water heater installation in Taiwan and simulated relevant government policies. The results showed that if the government in Taiwan continues to subsidize SWH installation with NT$2250/m2, SWH installation areas will reach the promoted target of 1,40,000m2 by 2020.