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How do solar photovoltaic feed-in tariffs interact with solar panel and silicon prices? An empirical study

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  • Arnaud de La Tour

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Matthieu Glachant

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

Abstract

Preferential feed-in tariffs (FITs) for solar generated electricity increases the demand for solar photovoltaic systems. They can thus induce price to increase, creating the potential for PV systems producers to collect rents. This paper analyses the interactions between feed-in tariffs, silicon prices and module prices, using weekly price data and FIT values in Germany, Italy, Spain, and France from January 2005 to May 2012. Relying methodologically on the Granger causality tests applied to vector autoregressive models, we show that since the end of the period of silicon shortage in 2009, module price variations cause changes in FITs, and not the reverse. This is good news as it suggests that the regulators have been able to prevent FITs to inflate module prices.

Suggested Citation

  • Arnaud de La Tour & Matthieu Glachant, 2013. "How do solar photovoltaic feed-in tariffs interact with solar panel and silicon prices? An empirical study," Working Papers hal-00809449, HAL.
    • Handle: RePEc:hal:wpaper:hal-00809449
    Note: View the original document on HAL open archive server: https://minesparis-psl.hal.science/hal-00809449v2
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    File URL: https://minesparis-psl.hal.science/hal-00809449v2/document
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    References listed on IDEAS

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    Cited by:

    1. Kristoffer Palage & Robert Lundmark & Patrik Söderholm, 2019. "The innovation effects of renewable energy policies and their interaction: the case of solar photovoltaics," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 21(2), pages 217-254, April.
    2. Arjun Mahalingam & David M. Reiner, 2016. "Energy Subsidies at Times of Economic Crisis: A Comparative Study and Scenario Analysis of Italy and Spain," Working Papers EPRG 1603, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    3. Hallegatte, Stephane & Fay, Marianne & Vogt-Schilb, Adrien, 2013. "Green industrial policies : when and how," Policy Research Working Paper Series 6677, The World Bank.

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    Keywords

    solar photovoltaic energy; feed-in tariffs; photovoltaic panel price;
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