IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v44y2014icp36-46.html
   My bibliography  Save this article

Responsive feed-in tariff adjustment to dynamic technology development

Author

Listed:
  • Grau, Thilo

Abstract

This paper reviews the adjustments of the feed-in tariffs for new solar photovoltaic (PV) installations in Germany. As PV system prices declined rapidly since 2009, the German government implemented automatic mechanisms to adjust the remuneration level for new installations in response to deployment volumes. This paper develops an analytic model to simulate weekly installations of PV systems of up to 30kW based on project profitability and project duration. The model accurately replicates observed market developments and is used to assess different adjustment mechanisms against multiple scenarios for PV system price developments. The analysis shows that responsive feed-in tariff schemes with frequent tariff adjustments and short qualifying periods reach deployment targets most effectively.

Suggested Citation

  • Grau, Thilo, 2014. "Responsive feed-in tariff adjustment to dynamic technology development," Energy Economics, Elsevier, vol. 44(C), pages 36-46.
    • Handle: RePEc:eee:eneeco:v:44:y:2014:i:c:p:36-46
    DOI: 10.1016/j.eneco.2014.03.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988314000620
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2014.03.015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Arthur van Benthem & Kenneth Gillingham & James Sweeney, 2008. "Learning-by-Doing and the Optimal Solar Policy in California," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 131-152.
    2. Butler, Lucy & Neuhoff, Karsten, 2008. "Comparison of feed-in tariff, quota and auction mechanisms to support wind power development," Renewable Energy, Elsevier, vol. 33(8), pages 1854-1867.
    3. Fischer, Carolyn, 2008. "Emissions pricing, spillovers, and public investment in environmentally friendly technologies," Energy Economics, Elsevier, vol. 30(2), pages 487-502, March.
    4. Fischer, Carolyn & Newell, Richard G., 2008. "Environmental and technology policies for climate mitigation," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 142-162, March.
    5. Lehmann, Paul & Gawel, Erik, 2013. "Why should support schemes for renewable electricity complement the EU emissions trading scheme?," Energy Policy, Elsevier, vol. 52(C), pages 597-607.
    6. Couture, Toby & Gagnon, Yves, 2010. "An analysis of feed-in tariff remuneration models: Implications for renewable energy investment," Energy Policy, Elsevier, vol. 38(2), pages 955-965, February.
    7. Rivers, Nic & Jaccard, Mark, 2006. "Choice of environmental policy in the presence of learning by doing," Energy Economics, Elsevier, vol. 28(2), pages 223-242, March.
    8. Kitzing, Lena & Mitchell, Catherine & Morthorst, Poul Erik, 2012. "Renewable energy policies in Europe: Converging or diverging?," Energy Policy, Elsevier, vol. 51(C), pages 192-201.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hitaj, Claudia & Löschel, Andreas, 2019. "The impact of a feed-in tariff on wind power development in Germany," Resource and Energy Economics, Elsevier, vol. 57(C), pages 18-35.
    2. Burtt, D. & Dargusch, P., 2015. "The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions," Applied Energy, Elsevier, vol. 148(C), pages 439-448.
    3. Klein, Martin & Deissenroth, Marc, 2017. "When do households invest in solar photovoltaics? An application of prospect theory," Energy Policy, Elsevier, vol. 109(C), pages 270-278.
    4. De Groote, Olivier & Gautier, Axel & Verboven, Frank, 2024. "The political economy of financing climate policy — Evidence from the solar PV subsidy programs," Resource and Energy Economics, Elsevier, vol. 77(C).
    5. Strupeit, Lars, 2017. "An innovation system perspective on the drivers of soft cost reduction for photovoltaic deployment: The case of Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 273-286.
    6. Karoline S. Rogge & Elisabeth Dütschke, 2017. "Exploring Perceptions of the Credibility of Policy Mixes: The Case of German Manufacturers of Renewable Power Generation Technologies," SPRU Working Paper Series 2017-23, SPRU - Science Policy Research Unit, University of Sussex Business School.
    7. Fouquet, Roger & Hippe, Ralph, 2022. "Twin transitions of decarbonisation and digitalisation: a historical perspective on energy and information in European economies," LSE Research Online Documents on Economics 115544, London School of Economics and Political Science, LSE Library.
    8. Matthew Lockwood, 2022. "Policy feedback and institutional context in energy transitions," Policy Sciences, Springer;Society of Policy Sciences, vol. 55(3), pages 487-507, September.
    9. Wang, Yunfei & Li, Jinke & O'Leary, Nigel & Shao, Jing, 2024. "Banding: A game changer in the Renewables Obligation scheme in the United Kingdom," Energy Economics, Elsevier, vol. 130(C).
    10. Zipp, Alexander, 2017. "The marketability of variable renewable energy in liberalized electricity markets – An empirical analysis," Renewable Energy, Elsevier, vol. 113(C), pages 1111-1121.
    11. Thilo Grau & Karsten Neuhoff, 2016. "Coordination of Renewable Energy Remuneration Schemes through Information Exchange," Discussion Papers of DIW Berlin 1574, DIW Berlin, German Institute for Economic Research.
    12. Germeshausen, Robert, 2016. "Effects of Attribute-Based Regulation on Technology Adoption - The Case of Feed-In Tariffs for Solar Photovoltaic," VfS Annual Conference 2016 (Augsburg): Demographic Change 145712, Verein für Socialpolitik / German Economic Association.
    13. Ramli, Makbul A.M. & Twaha, Ssennoga, 2015. "Analysis of renewable energy feed-in tariffs in selected regions of the globe: Lessons for Saudi Arabia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 649-661.
    14. Rogge, Karoline S. & Schleich, Joachim, 2018. "Do policy mix characteristics matter for low-carbon innovation? A survey-based exploration of renewable power generation technologies in Germany," Research Policy, Elsevier, vol. 47(9), pages 1639-1654.
    15. Xia, Fang & Lu, Xi & Song, Feng, 2020. "The role of feed-in tariff in the curtailment of wind power in China," Energy Economics, Elsevier, vol. 86(C).
    16. Rogge, Karoline S. & Pfluger, Benjamin & Geels, Frank, 2017. "Transformative policy mixes in socio-technical scenarios: The case of the low-carbon transition of the German electricity system (2010-2050)," Working Papers "Sustainability and Innovation" S11/2017, Fraunhofer Institute for Systems and Innovation Research (ISI).
    17. Nuñez-Jimenez, Alejandro & Knoeri, Christof & Rottmann, Fabian & Hoffmann, Volker H., 2020. "The role of responsiveness in deployment policies: A quantitative, cross-country assessment using agent-based modelling," Applied Energy, Elsevier, vol. 275(C).
    18. Kästel, Peter & Gilroy-Scott, Bryce, 2015. "Economics of pooling small local electricity prosumers—LCOE & self-consumption," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 718-729.
    19. Coffman, Makena & Wee, Sherilyn & Bonham, Carl & Salim, Germaine, 2016. "A policy analysis of Hawaii's solar tax credit," Renewable Energy, Elsevier, vol. 85(C), pages 1036-1043.
    20. Sirin, Selahattin Murat & Yilmaz, Berna N., 2020. "Variable renewable energy technologies in the Turkish electricity market: Quantile regression analysis of the merit-order effect," Energy Policy, Elsevier, vol. 144(C).
    21. Balta-Ozkan, Nazmiye & Yildirim, Julide & Connor, Peter M., 2015. "Regional distribution of photovoltaic deployment in the UK and its determinants: A spatial econometric approach," Energy Economics, Elsevier, vol. 51(C), pages 417-429.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less Than the Sum of Its Parts?," International Review of Environmental and Resource Economics, now publishers, vol. 4(1), pages 51-92, June.
    2. Lehmann, Paul, 2013. "Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers," Energy Policy, Elsevier, vol. 61(C), pages 635-641.
    3. Lancker, Kira & Quaas, Martin F., 2019. "Increasing marginal costs and the efficiency of differentiated feed-in tariffs," Energy Economics, Elsevier, vol. 83(C), pages 104-118.
    4. Paul Lehmann & Patrik Söderholm, 2018. "Can Technology-Specific Deployment Policies Be Cost-Effective? The Case of Renewable Energy Support Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 475-505, October.
    5. Sijm, Jos & Lehmann, Paul & Chewpreecha, Unnada & Gawel, Erik & Mercure, Jean-Francois & Pollitt, Hector & Strunz, Sebastian, 2014. "EU climate and energy policy beyond 2020: Are additional targets and instruments for renewables economically reasonable?," UFZ Discussion Papers 3/2014, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    6. Felix Groba & Barbara Breitschopf, 2013. "Impact of Renewable Energy Policy and Use on Innovation: A Literature Review," Discussion Papers of DIW Berlin 1318, DIW Berlin, German Institute for Economic Research.
    7. del Río, Pablo, 2012. "The dynamic efficiency of feed-in tariffs: The impact of different design elements," Energy Policy, Elsevier, vol. 41(C), pages 139-151.
    8. Kim, Kyoung-Kuk & Lee, Chi-Guhn, 2012. "Evaluation and optimization of feed-in tariffs," Energy Policy, Elsevier, vol. 49(C), pages 192-203.
    9. Kitzing, Lena, 2014. "Risk implications of renewable support instruments: Comparative analysis of feed-in tariffs and premiums using a mean–variance approach," Energy, Elsevier, vol. 64(C), pages 495-505.
    10. Martinát, Stanislav & Navrátil, Josef & Dvořák, Petr & Van der Horst, Dan & Klusáček, Petr & Kunc, Josef & Frantál, Bohumil, 2016. "Where AD plants wildly grow: The spatio-temporal diffusion of agricultural biogas production in the Czech Republic," Renewable Energy, Elsevier, vol. 95(C), pages 85-97.
    11. Tilmann Rave & Ursula Triebswetter & Johann Wackerbauer, 2013. "Koordination von Innovations-, Energie- und Umweltpolitik," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    12. Thilo Grau, 2014. "Comparison of Feed-in Tariffs and Tenders to Remunerate Solar Power Generation," Discussion Papers of DIW Berlin 1363, DIW Berlin, German Institute for Economic Research.
    13. Joseph E. Aldy & Alan J. Krupnick & Richard G. Newell & Ian W. H. Parry & William A. Pizer, 2010. "Designing Climate Mitigation Policy," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 903-934, December.
    14. Lehmann, Paul & Gawel, Erik, 2013. "Why should support schemes for renewable electricity complement the EU emissions trading scheme?," Energy Policy, Elsevier, vol. 52(C), pages 597-607.
    15. Kitzing, Lena & Juul, Nina & Drud, Michael & Boomsma, Trine Krogh, 2017. "A real options approach to analyse wind energy investments under different support schemes," Applied Energy, Elsevier, vol. 188(C), pages 83-96.
    16. Florian Habermacher & Paul Lehmann, 2017. "Commitment vs. Discretion in Climate and Energy Policy," CESifo Working Paper Series 6355, CESifo.
    17. Jeon, Chanwoong & Lee, Jeongjin & Shin, Juneseuk, 2015. "Optimal subsidy estimation method using system dynamics and the real option model: Photovoltaic technology case," Applied Energy, Elsevier, vol. 142(C), pages 33-43.
    18. Shen, Neng & Deng, Rumeng & Liao, Haolan & Shevchuk, Oleksandr, 2020. "Mapping renewable energy subsidy policy research published from 1997 to 2018: A scientometric review," Utilities Policy, Elsevier, vol. 64(C).
    19. Jenkins, Jesse D., 2014. "Political economy constraints on carbon pricing policies: What are the implications for economic efficiency, environmental efficacy, and climate policy design?," Energy Policy, Elsevier, vol. 69(C), pages 467-477.
    20. Ritzenhofen, Ingmar & Birge, John R. & Spinler, Stefan, 2016. "The structural impact of renewable portfolio standards and feed-in tariffs on electricity markets," European Journal of Operational Research, Elsevier, vol. 255(1), pages 224-242.

    More about this item

    Keywords

    Feed-in tariff; Solar photovoltaic; Renewable energy deployment;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:44:y:2014:i:c:p:36-46. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.