Suppose the government wanted to encourage the take-up of wood pellet burners. To do so, it introduces a 50% subsidy on purchase cost. Good news all round, you would have thought; manufacturers sell more boilers, householders buy more and the government reduces the nation's CO2 output. Except, of course, it doesn't work like that and never has done.
What actually happens is that the manufacturers and retailers of the boilers in the subsidised nations double their price. The government subsidy then goes directly to the retailers. Householders see no great price advantage and don't buy, and the government ends up spending a lot of money with no real reduction in CO2.
Take a look at http://kotly.com/ then take a look on eBay UK. Most of this kit is built not in China but in Eastern Europe; it fully meets CE standards and certification and can be installed in the UK without problem. And it's half the price of the same stuff sold domestically.
What's true for solar thermal above is also true for solar PV, except that most solar PV is made in China. Good news for Euro governments intent on increasing PV take-up at minimum cost to the taxpayer, one would have thought. But no. As Der Spiegel reveals, the reaction of the EU is to impose swingeing tariffs on Chinese PV to protect overpriced Euro manufacturers, fat margins and bloated profits. Yet again money is going straight from taxpayers pockets to fatcat corporate investors, revealing again the green-scam for what it is; a business opportunity for the big boys. It's got nothing to do with CO2.