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The best time to invest in photovoltaic panels in Flanders

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  • Beliën, Jeroen
  • De Boeck, Liesje
  • Colpaert, Jan
  • Cooman, Gert

Abstract

Up to now, there has been some controversy about green certificates (a form of subsidy) that are granted for the installation of photovoltaic (PV) panels in the Flemish residential sector. The Flemish government has already reduced the value of future green certificates, because they appeared to be excessively high. Currently, power providers have to pay for these certificates. Owners not having a PV installation suspect that they will be charged for those additional costs in the form of rising energy bills. As such, it seems that investing in PV panels would end up being the cheapest option for them in the long run. At the same time, we observe the following trends in analyzing costs and benefits in installing PV panels in the Flemish residential sector: the PV industry is booming causing PV panels to become cheaper; energy prices will continue to rise (with or without including the recovery of green certificates costs); tax revenues on the investment cost will be abolished; and the value of green certificates decreases when households postpone their investment in PV panels. It is therefore worth investigating when the investment in PV panels for the Flemish residential sector is optimal in terms of time. We compare the timing of different investments by analyzing their future value and return, embedded in a sensitivity analysis. By forecasting all relevant parameters, the analysis points out that the best period for investing in PV panels for the Flemish residential sector was December 2010 or June 2011. After 2011, PV panels remain a responsible financial investment but with a lower rate of return. The results further indicate that investment in PV panels was and still remains over-subsidized: the energy cost savings alone are almost sufficient to cover the investment cost. Therefore, the government should continue to decrease the subsidies in the near future. Apart from saving money, this would also stimulate the average Flemish household to invest in PV panels as soon as possible.

Suggested Citation

  • Beliën, Jeroen & De Boeck, Liesje & Colpaert, Jan & Cooman, Gert, 2013. "The best time to invest in photovoltaic panels in Flanders," Renewable Energy, Elsevier, vol. 50(C), pages 348-358.
    • Handle: RePEc:eee:renene:v:50:y:2013:i:c:p:348-358
    DOI: 10.1016/j.renene.2012.06.047
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    5. De Boeck, L. & Van Asch, S. & De Bruecker, P. & Audenaert, A., 2016. "Comparison of support policies for residential photovoltaic systems in the major EU markets through investment profitability," Renewable Energy, Elsevier, vol. 87(P1), pages 42-53.
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