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Assessment of the regulatory framework in view of effectiveness and distributional effects in the context of small-scale PV—The German experience

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  • Schick, Christoph
  • Hufendiek, Kai

Abstract

This paper evaluates the effectiveness of a regulatory framework based on feed-in tariffs to promote small-scale PV on basis of empirical data for Germany between 2000 to 2021. We show that feed-in tariffs have so far failed to exploit the technical small-scale PV potential evenly across regions. This implies significant differences in the allocation of regulatory benefits and costs associated with the promotion of renewable energy sources, leading to a situation of increasing socioeconomic inequality: few counties benefit strongly and many counties bear the costs. Over the past 20 years, in addition to margin effects due to disproportionately high feed-in tariffs, this inequality has increasingly been driven by steadily rising self-consumption. This leads, on average, to differences of over 40 percent in effective electricity costs between households with and without PV. We conclude that the current regulatory framework is insufficient to bring solar PV up to the needed level and to distribute the associated benefits and costs equitably across households. Based on this, we derive guiding principles of a future regulatory framework that enables more effective scaling of small-scale PV.

Suggested Citation

  • Schick, Christoph & Hufendiek, Kai, 2023. "Assessment of the regulatory framework in view of effectiveness and distributional effects in the context of small-scale PV—The German experience," Energy Policy, Elsevier, vol. 172(C).
    • Handle: RePEc:eee:enepol:v:172:y:2023:i:c:s0301421522005298
    DOI: 10.1016/j.enpol.2022.113310
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    References listed on IDEAS

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    1. repec:zbw:rwirep:0542 is not listed on IDEAS
    2. Frondel, Manuel & Ritter, Nolan & Schmidt, Christoph M. & Vance, Colin, 2010. "Economic impacts from the promotion of renewable energy technologies: The German experience," Energy Policy, Elsevier, vol. 38(8), pages 4048-4056, August.
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    5. Allan, Grant J. & McIntyre, Stuart G., 2017. "Green in the heart or greens in the wallet? The spatial uptake of small-scale renewable technologies," Energy Policy, Elsevier, vol. 102(C), pages 108-115.
    6. Bertsch, Valentin & Geldermann, Jutta & Lühn, Tobias, 2017. "What drives the profitability of household PV investments, self-consumption and self-sufficiency?," Applied Energy, Elsevier, vol. 204(C), pages 1-15.
    7. Grover, David & Daniels, Benjamin, 2017. "Social equity issues in the distribution of feed-in tariff policy benefits: A cross sectional analysis from England and Wales using spatial census and policy data," Energy Policy, Elsevier, vol. 106(C), pages 255-265.
    8. Christoph Schick & Nikolai Klempp & Kai Hufendiek, 2021. "Impact of Network Charge Design in an Energy System with Large Penetration of Renewables and High Prosumer Shares," Energies, MDPI, vol. 14(21), pages 1-26, October.
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