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Tariff revisions and the impact of variability of solar irradiation on PV policy support: The case of Italy

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  • Monarca, Umberto
  • Cassetta, Ernesto
  • Pozzi, Cesare
  • Dileo, Ivano

Abstract

The solar irradiation is one the most critical parameter to ensure the overall profitability of photovoltaic (PV) projects. During the period of the European solar boom, the PVGIS-3 radiation data have been largely used by policy makers in setting remuneration levels, as well as by project developers, banks and asset managers for professional assessment of the underlying financial return of the investment. High quality and more accurate data included in the updated PVGIS-CMSAF show that solar resources in Europe have been greatly underestimated by PVGIS-3. The present paper evaluates how reported changes in solar irradiation have affected both PV projects profitability and overall costs of subsidy for final consumers. By focusing on a large sample of Italian PV plants, our findings highlight that solar irradiation levels higher than those initially assumed have caused excessive rents and windfall profits for PV project developers thus potentially harming electricity users which are indirectly bearing the burden of the renewable energy sources (RES) incentives. In regulatory contexts suffering from information asymmetries between RES producers and regulatory agencies, support tariff set by public authorities should be periodically revised according to transparent procedures, whenever significant changes in long-term solar irradiation data occur.

Suggested Citation

  • Monarca, Umberto & Cassetta, Ernesto & Pozzi, Cesare & Dileo, Ivano, 2018. "Tariff revisions and the impact of variability of solar irradiation on PV policy support: The case of Italy," Energy Policy, Elsevier, vol. 119(C), pages 307-316.
    • Handle: RePEc:eee:enepol:v:119:y:2018:i:c:p:307-316
    DOI: 10.1016/j.enpol.2018.04.058
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    Citations

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    Cited by:

    1. Federica Daniele & Stefano Clò & Enza Maltese & Alessandra Pasquini, 2022. "Unburdening regulation: the impact of regulatory simplification on photovoltaic adoption in Italy," Working Papers - Economics wp2022_03.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    2. Peprah, Forson & Gyamfi, Samuel & Effah-Donyina, Eric & Amo-Boateng, Mark, 2023. "The pathway for electricity prosumption in Ghana," Energy Policy, Elsevier, vol. 177(C).
    3. Cassetta, Ernesto & Nava, Consuelo R. & Zoia, Maria Grazia, 2022. "A three-step procedure to investigate the convergence of electricity and natural gas prices in the European Union," Energy Economics, Elsevier, vol. 105(C).
    4. Daniel Lugo-Laguna & Angel Arcos-Vargas & Fernando Nuñez-Hernandez, 2021. "A European Assessment of the Solar Energy Cost: Key Factors and Optimal Technology," Sustainability, MDPI, vol. 13(6), pages 1-25, March.
    5. Wątróbski, Jarosław & Bączkiewicz, Aleksandra & Sałabun, Wojciech, 2022. "New multi-criteria method for evaluation of sustainable RES management," Applied Energy, Elsevier, vol. 324(C).
    6. Natália Gava Gastaldo & Graciele Rediske & Paula Donaduzzi Rigo & Carmen Brum Rosa & Leandro Michels & Julio Cezar Mairesse Siluk, 2019. "What is the Profile of the Investor in Household Solar Photovoltaic Energy Systems?," Energies, MDPI, vol. 12(23), pages 1-18, November.
    7. Daniele, Federica & Pasquini, Alessandra & Clò, Stefano & Maltese, Enza, 2023. "Unburdening regulation: The impact of regulatory simplification on photovoltaic adoption in Italy," Energy Economics, Elsevier, vol. 125(C).
    8. Mágui Lage & Rui Castro, 2022. "A Practical Review of the Public Policies Used to Promote the Implementation of PV Technology in Smart Grids: The Case of Portugal," Energies, MDPI, vol. 15(10), pages 1-20, May.
    9. Cassetta, Ernesto & Nava, Consuelo R. & Zoia, Maria Grazia, 2022. "EU electricity market integration and cross-country convergence in residential and industrial end-user prices," Energy Policy, Elsevier, vol. 165(C).
    10. Best, Rohan & Chareunsy, Andrea & Li, Han, 2021. "Equity and effectiveness of Australian small-scale solar schemes," Ecological Economics, Elsevier, vol. 180(C).

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