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The potentials of a reverse auction in allocating subsidies for cost-effective roof-top photovoltaic system deployment

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  • Mayr, Dieter
  • Schmidt, Johannes
  • Schmid, Erwin

Abstract

Photovoltaic (PV) has developed to one of the most promising technologies for renewable electricity generation. The Austrian government currently provides subsidies for roof-top PV systems through a constant, administratively determined feed-in tariff or an investment co-funding. In both subsidy schemes, applications are approved on a first-come, first-served basis. There are concerns about (i) the selection of suitable roofs for PV systems, and (ii) allocating subsidies among applicants to deploy roof-top PV systems cost-effectively. Thus we analyze the potentials of a simple discriminative first-price reverse auction application scheme. Applicants define individually the required level of subsidy and those with the lowest request for subsidies are selected. In an ex-post analysis, we evaluate the potentials of such a scheme in increasing power output and saving public spending for the federal state of Vorarlberg in Austria. Results indicate a potential increase of cumulated produced electricity between 15% and 18% in comparison to the current policy. In addition, a reverse auction-based system would lead to savings of public spending per kWh between 20% and 41%.

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  • Mayr, Dieter & Schmidt, Johannes & Schmid, Erwin, 2014. "The potentials of a reverse auction in allocating subsidies for cost-effective roof-top photovoltaic system deployment," Energy Policy, Elsevier, vol. 69(C), pages 555-565.
    • Handle: RePEc:eee:enepol:v:69:y:2014:i:c:p:555-565
    DOI: 10.1016/j.enpol.2014.01.029
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    7. Xu, Zhitao & Elomri, Adel & Al-Ansari, Tareq & Kerbache, Laoucine & El Mekkawy, Tarek, 2022. "Decisions on design and planning of solar-assisted hydroponic farms under various subsidy schemes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    8. Malte Gephart & Corinna Klessmann & Fabian Wigand, 2017. "Renewable energy auctions – When are they (cost-)effective?," Energy & Environment, , vol. 28(1-2), pages 145-165, March.
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    10. Matthäus, David, 2020. "Designing effective auctions for renewable energy support," Energy Policy, Elsevier, vol. 142(C).
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    15. Jakub Sawulski & Jan Witajewski-Baltvilks, 2017. "Optimal RES differentiation under technological uncertainty," IBS Working Papers 07/2017, Instytut Badan Strukturalnych.
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    17. Luis Ramirez Camargo & Judith Franco & Nilsa María Sarmiento Babieri & Silvina Belmonte & Karina Escalante & Raphaela Pagany & Wolfgang Dorner, 2016. "Technical, Economical and Social Assessment of Photovoltaics in the Frame of the Net-Metering Law for the Province of Salta, Argentina," Energies, MDPI, vol. 9(3), pages 1-21, February.
    18. Elizondo Azuela, Gabriela & Barroso, Luiz & Khanna, Ashish & Wang, Xiaodong & Wu, Yun & Cunha, Gabriel, 2014. "Performance of renewable energy auctions : experience in Brazil, China and India," Policy Research Working Paper Series 7062, The World Bank.
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