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An analysis on investment policy effect of China’s photovoltaic industry based on feedback model

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  • Yuan, Chaoqing
  • Liu, Sifeng
  • Yang, Yingjie
  • Chen, Ding
  • Fang, Zhigeng
  • Shui, Lulu

Abstract

China’s photovoltaic industry developed sharply, and now it is the only country whose production covers the installed. Since R&D policy and deployment policy of China’s PV industry should not increase its production, this paper focuses on impact of investment policy, regarded as subsidy, on the photovoltaic industry. Feedback model of China’s photovoltaic industry is built, and the parameters of the model were estimated. And then simulation is done based on the model. The results show that the expansion is mainly caused by overreaction to the potential of the industry, but not the investment policy. In fact, investment policy only causes price fluctuations and industry overcapacity to some extent. Therefore, China’s investment policy on PV industry investment should be reduced properly or even canceled, or at least it should be combined with deployment and R&D.

Suggested Citation

  • Yuan, Chaoqing & Liu, Sifeng & Yang, Yingjie & Chen, Ding & Fang, Zhigeng & Shui, Lulu, 2014. "An analysis on investment policy effect of China’s photovoltaic industry based on feedback model," Applied Energy, Elsevier, vol. 135(C), pages 423-428.
    • Handle: RePEc:eee:appene:v:135:y:2014:i:c:p:423-428
    DOI: 10.1016/j.apenergy.2014.08.103
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    2. Burtt, D. & Dargusch, P., 2015. "The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions," Applied Energy, Elsevier, vol. 148(C), pages 439-448.
    3. Ruyin Long & Wenhua Cui & Qianwen Li, 2017. "The Evolution and Effect Evaluation of Photovoltaic Industry Policy in China," Sustainability, MDPI, vol. 9(12), pages 1-40, November.
    4. Yang, Ying & Campana, Pietro Elia & Yan, Jinyue, 2020. "Potential of unsubsidized distributed solar PV to replace coal-fired power plants, and profits classification in Chinese cities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    5. Xin-gang, Zhao & Zhen, Wang, 2019. "Technology, cost, economic performance of distributed photovoltaic industry in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 110(C), pages 53-64.
    6. Saeed Solaymani, 2021. "Energy subsidy reform evaluation research – reviews in Iran," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 11(3), pages 520-538, June.
    7. Zou, Hongyang & Du, Huibin & Ren, Jingzheng & Sovacool, Benjamin K. & Zhang, Yongjie & Mao, Guozhu, 2017. "Market dynamics, innovation, and transition in China's solar photovoltaic (PV) industry: A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 197-206.
    8. Sun, Bing & Yu, Yixin & Qin, Chao, 2017. "Should China focus on the distributed development of wind and solar photovoltaic power generation? A comparative study," Applied Energy, Elsevier, vol. 185(P1), pages 421-439.
    9. Lin, Boqiang & Xie, Yongjing, 2023. "The impact of government subsidies on capacity utilization in the Chinese renewable energy industry: Does technological innovation matter?," Applied Energy, Elsevier, vol. 352(C).
    10. Xiong, Yongqing & Yang, Xiaohan, 2016. "Government subsidies for the Chinese photovoltaic industry," Energy Policy, Elsevier, vol. 99(C), pages 111-119.
    11. Zhang, Jian & Cho, Heejin & Luck, Rogelio & Mago, Pedro J., 2018. "Integrated photovoltaic and battery energy storage (PV-BES) systems: An analysis of existing financial incentive policies in the US," Applied Energy, Elsevier, vol. 212(C), pages 895-908.
    12. Wu, Qiyan & Zhang, Xiaoling & Sun, Jingwei & Ma, Zhifei & Zhou, Chen, 2016. "Locked post-fossil consumption of urban decentralized solar photovoltaic energy: A case study of an on-grid photovoltaic power supply community in Nanjing, China," Applied Energy, Elsevier, vol. 172(C), pages 1-11.
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