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Market viability of photovoltaic plants: merit order effect approach

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  • Janda, Karel
  • Tuma, Ladislav

Abstract

We consider future prospects of solar energy in Central Europe. We first provide the description of the Czech energy situation with emphasize on photovoltaic energy. After that we estimate the merit-order effect. In last five years the Czech wholesale price of electricity decreased on average by 0.009 EUR/MWh. The total average merit-order effect over five-year period was 4.544 EUR/MWh. The effects were more pronounced in later years. New Czech solar projects are not viable without subsidies and new projects would not be able to profitable without public support. Thus solar power plants do not appear to be a reasonable choice in the Czech Republic. Nevertheless, low Czech wholesale electricity prices make all electricity sources not competitive.

Suggested Citation

  • Janda, Karel & Tuma, Ladislav, 2016. "Market viability of photovoltaic plants: merit order effect approach," MPRA Paper 74884, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:74884
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    Cited by:

    1. Kolb, Sebastian & Dillig, Marius & Plankenbühler, Thomas & Karl, Jürgen, 2020. "The impact of renewables on electricity prices in Germany - An update for the years 2014–2018," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).

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    More about this item

    Keywords

    solar; photovoltaics; electricity; merit order effect;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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