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Assessing the Effect of Incentive Policies on Residential PV Investments in Colombia

Author

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  • Monica Castaneda

    (Department of Engineering, Natural Sciences and Engineering Faculty, Universidad Jorge Tadeo Lozano, Bogota 110311, Colombia)

  • Sebastian Zapata

    (Department of Engineering, Natural Sciences and Engineering Faculty, Universidad Jorge Tadeo Lozano, Bogota 110311, Colombia)

  • Andres Aristizabal

    (Department of Engineering, Natural Sciences and Engineering Faculty, Universidad Jorge Tadeo Lozano, Bogota 110311, Colombia)

Abstract

As the cost of solar photovoltaic (PV) falls, their potential for transforming modern electricity generation increases. Solar PV provides a simpler way of producing clean and affordable energy, which makes it an attractive investment. Great investments in solar PV have occurred in industrialized countries, but government efforts to promote this technology have not been effective in nonindustrialized countries. Despite this, some of these countries may have a high solar PV potential, such as Colombia, where policies to encourage solar PV are only just starting to take place. Therefore, this paper proposes a simulation model to assess different policies—feed-in tariff, net metering, and capital subsidy—to promote solar PV investments in the Colombian residential sector. Policies are assessed considering the criteria of efficiency and effectiveness. Simulation results suggest that (i) net metering is the most efficient policy with a cost indicator of 20,298 USD/MW; (ii) feed-in tariff is the most effective policy as it reaches the highest level of avoided CO 2 emissions—4,792,823 million tons of CO 2 —and a meaningful PV installed capacity of 7522 MW; (iii) capital subsidy is the least efficient policy as it has the highest cost indicator of 509,616 USD/MW.

Suggested Citation

  • Monica Castaneda & Sebastian Zapata & Andres Aristizabal, 2018. "Assessing the Effect of Incentive Policies on Residential PV Investments in Colombia," Energies, MDPI, vol. 11(10), pages 1-17, October.
    • Handle: RePEc:gam:jeners:v:11:y:2018:i:10:p:2614-:d:173130
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    2. López, Andrea Ruíz & Krumm, Alexandra & Schattenhofer, Lukas & Burandt, Thorsten & Montoya, Felipe Corral & Oberländer, Nora & Oei, Pao-Yu, 2020. "Solar PV generation in Colombia - A qualitative and quantitative approach to analyze the potential of solar energy market," Renewable Energy, Elsevier, vol. 148(C), pages 1266-1279.
    3. López, Andrea Ruíz & Krumm, Alexandra & Schattenhofer, Lukas & Burandt, Thorsten & Montoya, Felipe Corral & Oberländer, Nora & Oei, Pao-Yu, 2020. "Solar PV generation in Colombia - A qualitative and quantitative approach to analyze the potential of solar energy market," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 148, pages 1266-1279.
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    6. McRae, Shaun D. & Wolak, Frank A., 2021. "Retail pricing in Colombia to support the efficient deployment of distributed generation and electric stoves," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
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