Maximizing Solar PV Dissemination under Differential Subsidy Policy across Regions

Jeongmeen Suh,Sung-Guk Yoon

doi:10.3390/en13112763

Abstract

This study investigates the effect of a renewable energy dissemination policy on investment decisions regarding solar photovoltaic (PV) installation. We present a theoretical model and conduct a simulation analysis to estimate the total capacity of solar PV generators according to a given subsidy policy. We show how the capacity maximizing subsidy policy depends on the total amount of subsidy budget, interest rate, the expected amount of solar resource and land price in each region. We particularly focus on the improvements of solar PV capacities under the same subsidy budget when the subsidy policy is changed from uniform (equal for all regions) to differential (varying over regional characteristics). This improvement is shown through a case study using Korean data.

Highlights

To promote renewable energy, many governments have adopted various support policies such as feed-in-tariff (FIT), renewable portfolio standards (RPS), reduction in taxes, and subsidized capital costs for installments [1,2,3,4,5,6]
We focus on a subsidy policy for solar PV generators
Regions DJ and SJ do not install solar PV at all according to Proposition 1, and the total capacity of solar PV generators is 74,580 kW

Summary

Introduction

Many governments have adopted various support policies such as feed-in-tariff (FIT), renewable portfolio standards (RPS), reduction in taxes, and subsidized capital costs for installments [1,2,3,4,5,6]. Dissemination of renewable energy requires significant financial support as long as the electricity generated from renewable energy is more expensive than that generated from fossil fuels. In the New Policies Scenario projection, which assumes that the governments will adhere to their plans and which serves as the baseline scenario, the IEA expects subsidies to reach almost USD 180 billion per year in 2035 [7]. Owing to these support policies, the generation capacity of renewables has increased rapidly

Results

Discussion

Conclusion