IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v203y2017icp496-505.html
   My bibliography  Save this article

Analysis of feed-in tariff policies for solar photovoltaic in China 2011–2016

Author

Listed:
  • Ye, Liang-Cheng
  • Rodrigues, João F.D.
  • Lin, Hai Xiang

Abstract

In 2011 China initiated policies to promote the adoption of solar photovoltaic (PV) using feed-in tariff (FIT) policies. Since then the PV domestic market expanded substantially. In the past six years, the FIT policies were updated (adjustment of tariff levels, division of three FIT regions, setting of installation quotas) to address emerging problems such as PV waste, explosive installation, unbalanced spatial distribution. This paper aims to investigate the historical development and implementation of FIT policies in China from 2011 to 2016. The tools of net present value (NPV)/internal rate of return (IRR), learning curve and the system dynamics are employed to show the degree of economic incentives of FIT policies, to understand the learning rate of centralized PV systems, and to study the dynamic mechanism of the FIT system. We conclude that in the near term the tariff levels should be adjusted more frequently to keep IRR values in the range of 8–12%, and a tight quota combined with the deployment of ultra-high voltage (UHV) lines should be continued for the provinces with severe PV waste.

Suggested Citation

  • Ye, Liang-Cheng & Rodrigues, João F.D. & Lin, Hai Xiang, 2017. "Analysis of feed-in tariff policies for solar photovoltaic in China 2011–2016," Applied Energy, Elsevier, vol. 203(C), pages 496-505.
    • Handle: RePEc:eee:appene:v:203:y:2017:i:c:p:496-505
    DOI: 10.1016/j.apenergy.2017.06.037
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261917307894
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2017.06.037?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Huang, Ping & Negro, Simona O. & Hekkert, Marko P. & Bi, Kexin, 2016. "How China became a leader in solar PV: An innovation system analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 777-789.
    2. Ming-Zhi Gao, Anton & Fan, Chien-Te & Kai, Ji-Jung & Liao, Chao-Ning, 2015. "Sustainable photovoltaic technology development: step-by-step guidance for countries facing PV proliferation turmoil under the feed-in tariff scheme," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 156-163.
    3. Wand, Robert & Leuthold, Florian, 2011. "Feed-in tariffs for photovoltaics: Learning by doing in Germany?," Applied Energy, Elsevier, vol. 88(12), pages 4387-4399.
    4. Jenner, Steffen & Groba, Felix & Indvik, Joe, 2013. "Assessing the strength and effectiveness of renewable electricity feed-in tariffs in European Union countries," Energy Policy, Elsevier, vol. 52(C), pages 385-401.
    5. Li, Changsheng & Wang, Haiyu & Miao, Hong & Ye, Bin, 2017. "The economic and social performance of integrated photovoltaic and agricultural greenhouses systems: Case study in China," Applied Energy, Elsevier, vol. 190(C), pages 204-212.
    6. Shahmohammadi, M. Sadegh & Mohd. Yusuff, Rosnah & Keyhanian, Sina & Shakouri G., Hamed, 2015. "A decision support system for evaluating effects of Feed-in Tariff mechanism: Dynamic modeling of Malaysia’s electricity generation mix," Applied Energy, Elsevier, vol. 146(C), pages 217-229.
    7. Zeng, Ming & Yang, Yongqi & Fan, Qiannan & Liu, Yingxin & Zou, Zhuojun, 2015. "Coordination between clean energy generation and thermal power generation under the policy of “direct power-purchase for large users” in China," Utilities Policy, Elsevier, vol. 33(C), pages 10-22.
    8. Hui, Jingxuan & Cai, Wenjia & Wang, Can & Ye, Minhua, 2017. "Analyzing the penetration barriers of clean generation technologies in China’s power sector using a multi-region optimization model," Applied Energy, Elsevier, vol. 185(P2), pages 1809-1820.
    9. Kayser, Dirk, 2016. "Solar photovoltaic projects in China: High investment risks and the need for institutional response," Applied Energy, Elsevier, vol. 174(C), pages 144-152.
    10. Alishahi, E. & Moghaddam, M. Parsa & Sheikh-El-Eslami, M.K., 2012. "A system dynamics approach for investigating impacts of incentive mechanisms on wind power investment," Renewable Energy, Elsevier, vol. 37(1), pages 310-317.
    11. Gallego-Castillo, Cristobal & Victoria, Marta, 2015. "Cost-free feed-in tariffs for renewable energy deployment in Spain," Renewable Energy, Elsevier, vol. 81(C), pages 411-420.
    12. Sun, Honghang & Zhi, Qiang & Wang, Yibo & Yao, Qiang & Su, Jun, 2014. "China’s solar photovoltaic industry development: The status quo, problems and approaches," Applied Energy, Elsevier, vol. 118(C), pages 221-230.
    13. Xiao-Ping Lei & Zhi-Yun Zhao & Xu Zhang & Dar-Zen Chen & Mu-Hsuan Huang & Jia Zheng & Run-Sheng Liu & Jing Zhang & Yun-Hua Zhao, 2013. "Technological collaboration patterns in solar cell industry based on patent inventors and assignees analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 96(2), pages 427-441, August.
    14. Zhang, M.M. & Zhou, P. & Zhou, D.Q., 2016. "A real options model for renewable energy investment with application to solar photovoltaic power generation in China," Energy Economics, Elsevier, vol. 59(C), pages 213-226.
    15. Wang, Hongwei & Zheng, Shilin & Zhang, Yanhua & Zhang, Kai, 2016. "Analysis of the policy effects of downstream Feed-In Tariff on China’s solar photovoltaic industry," Energy Policy, Elsevier, vol. 95(C), pages 479-488.
    16. Zhi, Qiang & Sun, Honghang & Li, Yanxi & Xu, Yurui & Su, Jun, 2014. "China’s solar photovoltaic policy: An analysis based on policy instruments," Applied Energy, Elsevier, vol. 129(C), pages 308-319.
    17. Ouyang, Xiaoling & Lin, Boqiang, 2014. "Levelized cost of electricity (LCOE) of renewable energies and required subsidies in China," Energy Policy, Elsevier, vol. 70(C), pages 64-73.
    18. McDonald, Alan & Schrattenholzer, Leo, 2001. "Learning rates for energy technologies," Energy Policy, Elsevier, vol. 29(4), pages 255-261, March.
    19. Ahmad, Salman & Tahar, Razman Mat & Muhammad-Sukki, Firdaus & Munir, Abu Bakar & Rahim, Ruzairi Abdul, 2015. "Role of feed-in tariff policy in promoting solar photovoltaic investments in Malaysia: A system dynamics approach," Energy, Elsevier, vol. 84(C), pages 808-815.
    20. Wenbin Lin & Alun Gu & Xin Wang & Bin Liu, 2016. "Aligning emissions trading and feed-in tariffs in China," Climate Policy, Taylor & Francis Journals, vol. 16(4), pages 434-455, May.
    21. Arthur van Benthem & Kenneth Gillingham & James Sweeney, 2008. "Learning-by-Doing and the Optimal Solar Policy in California," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 131-152.
    22. Rodrigues, Sandy & Chen, Xiaoju & Morgado-Dias, F., 2017. "Economic analysis of photovoltaic systems for the residential market under China's new regulation," Energy Policy, Elsevier, vol. 101(C), pages 467-472.
    23. Sun, Peng & Nie, Pu-yan, 2015. "A comparative study of feed-in tariff and renewable portfolio standard policy in renewable energy industry," Renewable Energy, Elsevier, vol. 74(C), pages 255-262.
    24. Saed Alizamir & Francis de Véricourt & Peng Sun, 2016. "Efficient Feed-In-Tariff Policies for Renewable Energy Technologies," Operations Research, INFORMS, vol. 64(1), pages 52-66, February.
    25. Zhang, Sufang & Andrews-Speed, Philip & Ji, Meiyun, 2014. "The erratic path of the low-carbon transition in China: Evolution of solar PV policy," Energy Policy, Elsevier, vol. 67(C), pages 903-912.
    26. Hoppmann, Joern & Huenteler, Joern & Girod, Bastien, 2014. "Compulsive policy-making—The evolution of the German feed-in tariff system for solar photovoltaic power," Research Policy, Elsevier, vol. 43(8), pages 1422-1441.
    27. Zhao, Xin-gang & Wan, Guan & Yang, Yahui, 2015. "The turning point of solar photovoltaic industry in China: Will it come?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 178-188.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hengtian Wang & Xiaolong Yang & Xinxin Xu & Liu Fei, 2021. "Exploring Opportunities and Challenges of Solar PV Power under Carbon Peak Scenario in China: A PEST Analysis," Energies, MDPI, vol. 14(11), pages 1-28, May.
    2. Ruxu Sheng & Juntian Du & Songqi Liu & Changan Wang & Zidi Wang & Xiaoqian Liu, 2021. "Solar Photovoltaic Investment Changes across China Regions Using a Spatial Shift-Share Analysis," Energies, MDPI, vol. 14(19), pages 1-14, October.
    3. Corwin, Samuel & Johnson, Timothy L., 2019. "The role of local governments in the development of China's solar photovoltaic industry," Energy Policy, Elsevier, vol. 130(C), pages 283-293.
    4. Zhang, Alex Hongliang & Sirin, Selahattin Murat & Fan, Conglai & Bu, Maoliang, 2022. "An analysis of the factors driving utility-scale solar PV investments in China: How effective was the feed-in tariff policy?," Energy Policy, Elsevier, vol. 167(C).
    5. Zou, Hongyang & Du, Huibin & Brown, Marilyn A. & Mao, Guozhu, 2017. "Large-scale PV power generation in China: A grid parity and techno-economic analysis," Energy, Elsevier, vol. 134(C), pages 256-268.
    6. Behrens, Paul & Rodrigues, João F.D. & Brás, Tiago & Silva, Carlos, 2016. "Environmental, economic, and social impacts of feed-in tariffs: A Portuguese perspective 2000–2010," Applied Energy, Elsevier, vol. 173(C), pages 309-319.
    7. Zhang, Lingxian & Wang, Jieqiong & Wen, Haojie & Fu, Zetian & Li, Xinxing, 2016. "Operating performance, industry agglomeration and its spatial characteristics of Chinese photovoltaic industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 373-386.
    8. Dianat, Fateme & Khodakarami, Vahid & Hosseini, Seyed-Hossein & Shakouri G, Hamed, 2022. "Combining game theory concepts and system dynamics for evaluating renewable electricity development in fossil-fuel-rich countries in the Middle East and North Africa," Renewable Energy, Elsevier, vol. 190(C), pages 805-821.
    9. Libo Zhang & Qian Du & Dequn Zhou, 2021. "Grid Parity Analysis of China’s Centralized Photovoltaic Generation under Multiple Uncertainties," Energies, MDPI, vol. 14(7), pages 1-19, March.
    10. Bossink, Bart A.G., 2017. "Demonstrating sustainable energy: A review based model of sustainable energy demonstration projects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 1349-1362.
    11. Binz, Christian & Gosens, Jorrit & Hansen, Teis & Hansen, Ulrich Elmer, 2017. "Toward Technology-Sensitive Catching-Up Policies: Insights from Renewable Energy in China," World Development, Elsevier, vol. 96(C), pages 418-437.
    12. Liu, Chang & Liu, Linlin & Zhang, Dayong & Fu, Jiasha, 2021. "How does the capital market respond to policy shocks? Evidence from listed solar photovoltaic companies in China," Energy Policy, Elsevier, vol. 151(C).
    13. Xiong, Yongqing & Yang, Xiaohan, 2016. "Government subsidies for the Chinese photovoltaic industry," Energy Policy, Elsevier, vol. 99(C), pages 111-119.
    14. Li, Yun & Nie, Dan & Zhao, Xingang & Li, Yanbin, 2017. "Market structure and performance: An empirical study of the Chinese solar cell industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 78-82.
    15. Zhang, M.M. & Zhou, D.Q. & Zhou, P. & Chen, H.T., 2017. "Optimal design of subsidy to stimulate renewable energy investments: The case of China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 873-883.
    16. Sufang Zhang, . "Analysis of Distributed Solar Photovoltaic (DSPV) Power Policy in China," Chapters, in: Shigeru Kimura & Youngho Chang & Yanfei Li (ed.), Financing Renewable Energy Development in East Asia Summit Countries A Primer of Effective Policy Instruments, chapter 5, pages 137-159, Economic Research Institute for ASEAN and East Asia (ERIA).
    17. Li, Yan & Zhang, Qi & Wang, Ge & McLellan, Benjamin & Liu, Xue Fei & Wang, Le, 2018. "A review of photovoltaic poverty alleviation projects in China: Current status, challenge and policy recommendations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 214-223.
    18. de la Hoz, Jordi & Martín, Helena & Miret, Jaume & Castilla, Miguel & Guzman, Ramon, 2016. "Evaluating the 2014 retroactive regulatory framework applied to the grid connected PV systems in Spain," Applied Energy, Elsevier, vol. 170(C), pages 329-344.
    19. Yu, Chin-Hsien & Wu, Xiuqin & Lee, Wen-Chieh & Zhao, Jinsong, 2021. "Resource misallocation in the Chinese wind power industry: The role of feed-in tariff policy," Energy Economics, Elsevier, vol. 98(C).
    20. Paul Lehmann & Patrik Söderholm, 2018. "Can Technology-Specific Deployment Policies Be Cost-Effective? The Case of Renewable Energy Support Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 475-505, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:203:y:2017:i:c:p:496-505. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.