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Economic assessment and grid parity analysis of photovoltaic power generation considering tradable green certificate

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  • Wang, Chizhong
  • Chen, Heng
  • Wang, Zhengwei
  • Gao, Yue
  • Zhang, Guoqiang

Abstract

The tradable green certificate (TGC) system provides a new opportunity to promote the grid parity of photovoltaic (PV) power generation in China. A PV power generation Levelized Cost of Electricity (LCOE) assessment model is presented that incorporates the impact of TGC on the economic viability of PV projects. The model is optimized for China's unique tax system and is applied to analyze the economic performance of PV power generation across various provinces in China for the year 2022. Subsequently, sensitivity analysis is conducted to assess the responsiveness of PV LCOE to different influencing factors, identifying the key elements affecting the economic efficiency of PV projects. Finally, scenario analysis is employed to calculate the potential decline pathways of LCOE in each province under various future scenarios, exploring opportunities for cost reduction within the framework of the TGC system. The findings indicate that, upon incorporating the TGC system, the average LCOE of PV power generation decreases by 5.19 %. Key drivers of this cost reduction include initial investment, operation and maintenance costs, and TGCs price, with initial investment being the predominant factor.

Suggested Citation

  • Wang, Chizhong & Chen, Heng & Wang, Zhengwei & Gao, Yue & Zhang, Guoqiang, 2025. "Economic assessment and grid parity analysis of photovoltaic power generation considering tradable green certificate," Applied Energy, Elsevier, vol. 382(C).
    • Handle: RePEc:eee:appene:v:382:y:2025:i:c:s0306261925000121
    DOI: 10.1016/j.apenergy.2025.125282
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