IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v95y2016icp479-488.html
   My bibliography  Save this article

Analysis of the policy effects of downstream Feed-In Tariff on China’s solar photovoltaic industry

Author

Listed:
  • Wang, Hongwei
  • Zheng, Shilin
  • Zhang, Yanhua
  • Zhang, Kai

Abstract

The Chinese government initiated the Feed-In Tariff (“FIT”) policy for downstream power generation in August 2013. The effectiveness of the downstream FIT policy has attracted the attention of academia and government. Using the quarterly data of listed solar PV companies between 2009 and 2015, this paper provides an empirical analysis regarding the effects of the downstream FIT policy. We find that (1) the FIT policy has significantly enhanced the inventory turnover of listed PV firms and improved their profitability; (2) the FIT policy has significant effects on the inventory turnover of midstream companies and mixed industry-chain companies mainly engaged in downstream operations; (3) FIT policy is more favorable towards increasing the inventory turnover of private enterprises. Our results indicate that the FIT policy can have substantial effects on the sustainable development of China's solar photovoltaic industry.

Suggested Citation

  • Wang, Hongwei & Zheng, Shilin & Zhang, Yanhua & Zhang, Kai, 2016. "Analysis of the policy effects of downstream Feed-In Tariff on China’s solar photovoltaic industry," Energy Policy, Elsevier, vol. 95(C), pages 479-488.
    • Handle: RePEc:eee:enepol:v:95:y:2016:i:c:p:479-488
    DOI: 10.1016/j.enpol.2016.03.026
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142151630129X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2016.03.026?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. Susanne Dröge & Philipp Schröder, 2005. "How to Turn an Industry Green: Taxes versus Subsidies," Journal of Regulatory Economics, Springer, vol. 27(2), pages 177-202, November.
    2. Ouyang, Xiaoling & Lin, Boqiang, 2014. "Levelized cost of electricity (LCOE) of renewable energies and required subsidies in China," Energy Policy, Elsevier, vol. 70(C), pages 64-73.
    3. Cherni, Judith A. & Kentish, Joanna, 2007. "Renewable energy policy and electricity market reforms in China," Energy Policy, Elsevier, vol. 35(7), pages 3616-3629, July.
    4. Moosavian, S.M. & Rahim, N.A. & Selvaraj, J. & Solangi, K.H., 2013. "Energy policy to promote photovoltaic generation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 44-58.
    5. Antonelli, Marco & Desideri, Umberto, 2014. "The doping effect of Italian feed-in tariffs on the PV market," Energy Policy, Elsevier, vol. 67(C), pages 583-594.
    6. Huo, Mo-lin & Zhang, Dan-wei, 2012. "Lessons from photovoltaic policies in China for future development," Energy Policy, Elsevier, vol. 51(C), pages 38-45.
    7. Liou, Hwa Meei, 2010. "Policies and legislation driving Taiwan's development of renewable energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(7), pages 1763-1781, September.
    8. Wang, Feng & Yin, Haitao & Li, Shoude, 2010. "China's renewable energy policy: Commitments and challenges," Energy Policy, Elsevier, vol. 38(4), pages 1872-1878, April.
    9. White, Lee V. & Lloyd, Bob & Wakes, Sarah J., 2013. "Are Feed-in Tariffs suitable for promoting solar PV in New Zealand cities?," Energy Policy, Elsevier, vol. 60(C), pages 167-178.
    10. Yu, Feifei & Guo, Yue & Le-Nguyen, Khuong & Barnes, Stuart J. & Zhang, Weiting, 2016. "The impact of government subsidies and enterprises’ R&D investment: A panel data study from renewable energy in China," Energy Policy, Elsevier, vol. 89(C), pages 106-113.
    11. Rigter, Jasper & Vidican, Georgeta, 2010. "Cost and optimal feed-in tariff for small scale photovoltaic systems in China," Energy Policy, Elsevier, vol. 38(11), pages 6989-7000, November.
    12. Shen, Jianfei & Luo, Chen, 2015. "Overall review of renewable energy subsidy policies in China – Contradictions of intentions and effects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1478-1488.
    13. Chou, Shuo-Yan & Nguyen, Thi Anh Tuyet & Yu, Tiffany Hui-Kuang & Phan, Nguyen Ky Phuc, 2015. "Financial assessment of government subsidy policy on photovoltaic systems for industrial users: A case study in Taiwan," Energy Policy, Elsevier, vol. 87(C), pages 505-516.
    14. Grau, Thilo & Huo, Molin & Neuhoff, Karsten, 2012. "Survey of photovoltaic industry and policy in Germany and China," Energy Policy, Elsevier, vol. 51(C), pages 20-37.
    15. Hsu, Chiung-Wen, 2012. "Using a system dynamics model to assess the effects of capital subsidies and feed-in tariffs on solar PV installations," Applied Energy, Elsevier, vol. 100(C), pages 205-217.
    16. Srinivasan, Sunderasan, 2009. "Subsidy policy and the enlargement of choice," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(9), pages 2728-2733, December.
    17. Zhang, Sufang & Andrews-Speed, Philip & Ji, Meiyun, 2014. "The erratic path of the low-carbon transition in China: Evolution of solar PV policy," Energy Policy, Elsevier, vol. 67(C), pages 903-912.
    18. Hagerman, Shelly & Jaramillo, Paulina & Morgan, M. Granger, 2016. "Is rooftop solar PV at socket parity without subsidies?," Energy Policy, Elsevier, vol. 89(C), pages 84-94.
    19. Gang Chen, 2015. "From mercantile strategy to domestic demand stimulation: changes in China's solar PV subsidies," Asia Pacific Business Review, Taylor & Francis Journals, vol. 21(1), pages 96-112, January.
    Full references (including those not matched with items on IDEAS)

    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. Zhou, Dequn & Chong, Zhaotian & Wang, Qunwei, 2020. "What is the future policy for photovoltaic power applications in China? Lessons from the past," Resources Policy, Elsevier, vol. 65(C).
    2. Zhang, M.M. & Zhou, D.Q. & Zhou, P. & Chen, H.T., 2017. "Optimal design of subsidy to stimulate renewable energy investments: The case of China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 873-883.
    3. Zhang, Fang & Deng, Hao & Margolis, Robert & Su, Jun, 2015. "Analysis of distributed-generation photovoltaic deployment, installation time and cost, market barriers, and policies in China," Energy Policy, Elsevier, vol. 81(C), pages 43-55.
    4. 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.
    5. Dong, Liang & Liang, Hanwei & Gao, Zhiqiu & Luo, Xiao & Ren, Jingzheng, 2016. "Spatial distribution of China׳s renewable energy industry: Regional features and implications for a harmonious development future," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1521-1531.
    6. Chong, Zhaotian & Wang, Qunwei & Wang, Lei, 2023. "Is the photovoltaic power generation policy effective in China? A quantitative analysis of policy synergy based on text mining," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
    7. Ghosh, Saptak & Nair, Akhilesh & Krishnan, S.S., 2015. "Techno-economic review of rooftop photovoltaic systems: Case studies of industrial, residential and off-grid rooftops in Bangalore, Karnataka," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 1132-1142.
    8. Antonelli, Marco & Desideri, Umberto, 2014. "The doping effect of Italian feed-in tariffs on the PV market," Energy Policy, Elsevier, vol. 67(C), pages 583-594.
    9. Liu, Chang & Liu, Linlin & Zhang, Dayong & Fu, Jiasha, 2021. "How does the capital market respond to policy shocks? Evidence from listed solar photovoltaic companies in China," Energy Policy, Elsevier, vol. 151(C).
    10. Kejia Yang & Johan Schot & Bernhard Truffer, 2020. "Shaping the Directionality of Sustainability Transitions: The Diverging Development Patterns of Solar PV in Two Chinese Provinces," SPRU Working Paper Series 2020-14, SPRU - Science Policy Research Unit, University of Sussex Business School.
    11. Zeting LIU, 2013. "La politique d’innovation chinoise face au défi de la transition énergétique China's innovation policy and the challenge of energy transition: the case of photovoltaic and wind turbine industries," Working Papers 271, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
    12. Ayoub, Nasser & Yuji, Naka, 2012. "Governmental intervention approaches to promote renewable energies—Special emphasis on Japanese feed-in tariff," Energy Policy, Elsevier, vol. 43(C), pages 191-201.
    13. Felix Groba & Jing Cao, 2015. "Chinese Renewable Energy Technology Exports: The Role of Policy, Innovation and Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(2), pages 243-283, February.
    14. Huang, Ping & Negro, Simona O. & Hekkert, Marko P. & Bi, Kexin, 2016. "How China became a leader in solar PV: An innovation system analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 777-789.
    15. Yuan, Jiahai & Sun, Shenghui & Zhang, Wenhua & Xiong, Minpeng, 2014. "The economy of distributed PV in China," Energy, Elsevier, vol. 78(C), pages 939-949.
    16. Awaworyi Churchill, Sefa & Inekwe, John & Ivanovski, Kris, 2021. "R&D expenditure and energy consumption in OECD nations," Energy Economics, Elsevier, vol. 100(C).
    17. Chen, Zhisong & Su, Shong-Iee Ivan, 2014. "Photovoltaic supply chain coordination with strategic consumers in China," Renewable Energy, Elsevier, vol. 68(C), pages 236-244.
    18. Zhang, Alex Hongliang & Sirin, Selahattin Murat & Fan, Conglai & Bu, Maoliang, 2022. "An analysis of the factors driving utility-scale solar PV investments in China: How effective was the feed-in tariff policy?," Energy Policy, Elsevier, vol. 167(C).
    19. Wang, Qiang & Kwan, Mei-Po & Fan, Jie & Zhou, Kan & Wang, Ya-Fei, 2019. "A study on the spatial distribution of the renewable energy industries in China and their driving factors," Renewable Energy, Elsevier, vol. 139(C), pages 161-175.
    20. Fuquan Zhao & Feiqi Liu & Han Hao & Zongwei Liu, 2020. "Carbon Emission Reduction Strategy for Energy Users in China," Sustainability, MDPI, vol. 12(16), pages 1-19, August.

    More about this item

    Keywords

    Solar PV industry; Feed-In Tariff policy; Policy effect;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - 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:enepol:v:95:y:2016:i:c:p:479-488. 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/enpol .

    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.