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Photovoltaic supply chain coordination with strategic consumers in China

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  • Chen, Zhisong
  • Su, Shong-Iee Ivan

Abstract

In the context of global climate change, the solar photovoltaic (PV) energy has regained its attention by many governments. The purpose of this paper is to study the coordination mechanisms of the photovoltaic supply chain considering the strategic consumers' behavior under the government's subsidy policies and its impact on the decisions of supply chain stakeholders. A centralized decision model and a revenue sharing contract coordination model for PV supply chain with strategic consumers are respectively formulated and discussed. Using the coordination model and the statistics from the development report of PV industry in the world during 2008–2012, the PV supply chain with monocrystalline modules of 72 solar cells for general power system solutions is analyzed. The analysis has found that revenue sharing is a good coordination mechanism for PV supply chain in the presence of the strategic consumers; while setting a low discount rate and the reduction of modules and assembling costs can increase the utilization of PV systems and the benefit of PV supply chain. The results suggest that governments should set appropriate subsidy policy to encourage PV industry development; the polysilicon module suppliers should enhance the relationship with PV assembler to achieve better coordination and adapt their capacity investment plan and manufacturing schedule to customer demands; in the presence of strategic consumers, the PV assemblers should set appropriate discount rate and share the information with key suppliers to optimize inventory and retail price decision to achieve better coordination; and the strategic consumers should enhance the utilization of PV system to increase their electrical outputs.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:renene:v:68:y:2014:i:c:p:236-244
    DOI: 10.1016/j.renene.2014.01.035
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    Cited by:

    1. Jiayi Joey Yu & Christopher S. Tang & Zuo-Jun Max Shen, 2018. "Improving Consumer Welfare and Manufacturer Profit via Government Subsidy Programs: Subsidizing Consumers or Manufacturers?," Manufacturing & Service Operations Management, INFORMS, vol. 20(4), pages 752-766, October.
    2. Zheng, Shiyuan & Jiang, Changmin & Fu, Xiaowen & Ge, Ying-En & Shu, Jia, 2022. "Subsidies for green technology adoption under uncertain demand and incomplete information," Omega, Elsevier, vol. 112(C).
    3. Chenjun Sun & Zengqiang Mi & Hui Ren & Fei Wang & Jing Chen & David Watts & Jinling Lu, 2018. "Study on the Incentives Mechanism for the Development of Distributed Photovoltaic Systems from a Long-Term Perspective," Energies, MDPI, vol. 11(5), pages 1-18, May.
    4. Wolfgang Albrecht & Martin Steinrücke, 2020. "Continuous-time scheduling of production, distribution and sales in photovoltaic supply chains with declining prices," Flexible Services and Manufacturing Journal, Springer, vol. 32(3), pages 629-667, September.
    5. Chen, Zhisong & Ivan Su, Shong-Iee, 2019. "Social welfare maximization with the least subsidy: Photovoltaic supply chain equilibrium and coordination with fairness concern," Renewable Energy, Elsevier, vol. 132(C), pages 1332-1347.
    6. Zhao, Jing & Zhang, Qin, 2021. "The effect of contract methods on the lead time of a two-level photovoltaic supply chain: revenue-sharing vs. cost-sharing," Energy, Elsevier, vol. 231(C).
    7. Zhang, Juan & Huang, Jian, 2021. "Vehicle product-line strategy under government subsidy programs for electric/hybrid vehicles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    8. Bingtuan Gao & Wenhu Zhang & Yi Tang & Mingjin Hu & Mingcheng Zhu & Huiyu Zhan, 2014. "Game-Theoretic Energy Management for Residential Users with Dischargeable Plug-in Electric Vehicles," Energies, MDPI, vol. 7(11), pages 1-20, November.
    9. Jiayi Joey Yu & Christopher S. Tang & ManMohan S. Sodhi & James Knuckles, 2020. "Optimal Subsidies for Development Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 22(6), pages 1131-1147, November.
    10. Maria A. Franco & Stefan N. Groesser, 2021. "A Systematic Literature Review of the Solar Photovoltaic Value Chain for a Circular Economy," Sustainability, MDPI, vol. 13(17), pages 1-35, August.
    11. Xiaodan Guo & Dongxiao Niu & Bowen Xiao, 2016. "Assessment of Air-Pollution Control Policy’s Impact on China’s PV Power: A System Dynamics Analysis," Energies, MDPI, vol. 9(5), pages 1-23, May.
    12. Zhisong Chen & Keith C. K. Cheung & Xiangtong Qi, 2021. "Subsidy policies and operational strategies for multiple competing photovoltaic supply chains," Flexible Services and Manufacturing Journal, Springer, vol. 33(4), pages 914-955, December.
    13. Chenxu Ke & Bo Yan & Jingna Ji, 2023. "Pricing new and remanufactured products under patent protection and government intervention," Annals of Operations Research, Springer, vol. 324(1), pages 131-161, May.
    14. Guo, Xiaodan & Guo, Xiaopeng, 2015. "China's photovoltaic power development under policy incentives: A system dynamics analysis," Energy, Elsevier, vol. 93(P1), pages 589-598.
    15. Li Liu & Zhe Wang & Jiangtao Xu & Zaisheng Zhang, 2023. "Green baton: how government interventions advance green technological innovation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11121-11152, October.
    16. Chenxu Ke & Bo Yan & Ruofan Xu, 2017. "A group-buying mechanism for considering strategic consumer behavior," Electronic Commerce Research, Springer, vol. 17(4), pages 721-752, December.

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