The Portuguese government confirmed its intentions to embrace renewable energy as early as 2001 when it launched a new energy policy, The E4 programme. This innovative programme consisted of a set of measures which were targeted at promoting a constant and innovative approach to the rapidly developing solar market in this country. The E4 programme also endorsed the Portuguese stance on the carbon footprint issue.

The climate in Portugal make it an ideal country to take advantage of the renewable power of the sun and the government realises that the weak economy of the country will greatly benefit from a specialised solar industry within it.

Portugal has only recently taken such an active stance concerning renewable energy and in the early part of this century it had very little solar power whatsoever, but the country is now in line to becoming one of the EU's most innovative countries in this industry even though it only has a population of 10.6 million people.

A programme launched by the Ministry of Economy and Innovation in Portugal (http://www.min-economia.pt) to encourage renewable energy has proved to be extremely popular. This scheme includes a package of the purchase price of a complete solar system as well as the installation and maintenance at a discount to the general public of at least 50%.

There is also an initial grant of EUR 1641.70 as well as a deduction of 30% in IRS benefits. The Government has also implemented loan structures with various financial institutions which will offer lending at favourable rates.

Portugal also has attractive feed-in rates of which more details can be found at http://solar.fc.ul.pt/lafspapers/6DV25.pdf . A new feed-in tariff was introduced by the Government in 2007 which grants 0.27 €/kWh for CSP plants below 10MW and 0.16-0.20 €/kWh for CSP plants above 10MW.

It is estimated that the length of time taken to recoup the initial investment of a fully fitted solar energy system which would include the various Government incentives would be nine years for a home of average size. This relatively short space of time is mainly due to the Portuguese climate and the incentives offered as well as the favorable interest charges should a loan need to be taken out from any of the approved financial institutions.