Abstract
It has been widely agreed that to incentivize renewables integration into the power system, not only pricing mechanisms, but price adjustment mechanisms have played a vital role, and it has been true for the German Energiewende. This study is to carry out a detailed analysis of investment results influenced by innovative price adjustment mechanisms from an auto degression rate to a feedback system. Employing linear regression models for the historical data of investment in small-scale rooftop PV projects in Germany, we have found out a better correlation between PV system price and feed-in tariff (92.09%) under quarter feedback and monthly adjustment mechanism compared to an annual feedback system. However, the underinvestment in recent years reveals that a feedback mechanism without specific mathematical shapes was not effective enough in term of meeting the targeted volume. Therefore, further researches are to design mathematical images of feedback mechanism in order to find out the trajectory of electricity price in the future which at the same time satisfies the target of investment and economic effectiveness.
Highlights
Energy transition is becoming a global trend of the electricity industry
This study is to carry out a detailed analysis of investment results influenced by innovative price adjustment mechanisms from an auto degression rate to a feedback system
Employing linear regression models for the historical data of investment in small-scale rooftop PV projects in Germany, we have found out a better correlation between PV system price and feed-in tariff (92.09%) under quarter feedback and monthly adjustment mechanism compared to an annual feedback system
Summary
Energy transition is becoming a global trend of the electricity industry. Germany is one of the leaders of this movement which is considered as a successful pattern of integration of wind and solar into the power market [1]. Compared to the rest of the world, Germany started to immigrate renewables into the power system earlier It took this country long time to prepare for the integration of solar PV. Under the FIT mechanism, Germany was successful in encouraging private investment in renewables [10] This price system did not expose investors to a price competition. Compared to the FIT, the auction mechanism which requires competitive pricing is expected to be a better tool to control the investment. Under this system, with given targets, the low-cost projects are favored and approved. The present study was designed to investigate the impact of different price adjustment policies on the investment in solar power as well as the electricity bill in Germany.
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