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Grid parity analysis of photovoltaic systems considering feed-in tariff and renewable energy certificate schemes in Hong Kong

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  • Zhang, Ruixiaoxiao
  • Lee, Minhyun
  • Huang, Lijie

Abstract

The Hong Kong government has actively promoted the development of renewable energy with two local utility companies to achieve its renewable energy target. Accordingly, two crucial initiatives, the feed-in tariff (FiT) and renewable energy certificate (REC) schemes, have been launched to boost the installation of renewable energy systems, particularly photovoltaic (PV) systems. However, the efficiency and effectiveness of these schemes on grid parity achievement have not been investigated from the perspectives of different stakeholders. To fill this research gap, this study adopts the levelized cost of electricity (LCOE) models to evaluate the role of FiT and REC schemes on realising the grid parity from the residential PV installers' and utility companies’ perspectives, respectively. As a supplementary indicator, the levelized profit of electricity (LPOE) is applied to investigate the economic profitability. The superiority of this study is to expand a general LCOE model into context-specific LCOE and LPOE models considering different grid parity judgement standards from the two sectors. Through a comprehensive analysis, it is indicated that for residential PV installers, the achievement of grid parity is affected by the government electricity subsidy scheme, the trend of PV system capital cost as well as which utility companies they subscribe. For utility companies, the REC price is found sufficient to compensate the lifetime expenditures on large-scale PV systems. Sensitivity analysis indicates that unit capital cost and annual solar power generation are the most critical factors to reduce LCOE in order to achieve earlier grid parity years.

Suggested Citation

  • Zhang, Ruixiaoxiao & Lee, Minhyun & Huang, Lijie, 2023. "Grid parity analysis of photovoltaic systems considering feed-in tariff and renewable energy certificate schemes in Hong Kong," Renewable and Sustainable Energy Reviews, Elsevier, vol. 181(C).
    • Handle: RePEc:eee:rensus:v:181:y:2023:i:c:s136403212300182x
    DOI: 10.1016/j.rser.2023.113326
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    Citations

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    Cited by:

    1. Wang, Rong & Hasanefendic, Sandra & Bossink, Bart, 2025. "A review of grid parity assessment for solar photovoltaics," Renewable and Sustainable Energy Reviews, Elsevier, vol. 216(C).
    2. Chong, Shijia & Wu, Jing & Chang, I-Shin, 2024. "Cost accounting and economic competitiveness evaluation of photovoltaic power generation in China —— based on the system levelized cost of electricity," Renewable Energy, Elsevier, vol. 222(C).
    3. Wang, Chizhong & Chen, Heng & Wang, Zhengwei & Gao, Yue & Zhang, Guoqiang, 2025. "Economic assessment and grid parity analysis of photovoltaic power generation considering tradable green certificate," Applied Energy, Elsevier, vol. 382(C).
    4. Mardones, Cristian, 2023. "Economic and environmental effects of financing subsidies for non-conventional renewable energies with a carbon tax – A comparison of intersectoral models," Renewable Energy, Elsevier, vol. 217(C).
    5. Huang, Lijie & Zhang, Ruixiaoxiao & Lee, Minhyun & Shen, Geoffrey Qiping & Rai, Varun & Beck, Ariane, 2025. "Determining community solar rates and subsidy payments for a sustainable community shared solar project in Hong Kong," Renewable Energy, Elsevier, vol. 242(C).
    6. Chen, Yuzhu & Guo, Weimin & Lund, Peter D. & Du, Na & Yang, Kun & wang, Jun, 2024. "Configuration optimization of a wind-solar based net-zero emission tri-generation energy system considering renewable power and carbon trading mechanisms," Renewable Energy, Elsevier, vol. 232(C).
    7. Zheng, Yangbing & Xue, Xiao & Xi, Sun & Xin, Wang, 2024. "Balancing Possibilist-probabilistic risk assessment for smart energy hubs: Enabling secure peer-to-peer energy sharing with CCUS technology and cyber-security," Energy, Elsevier, vol. 304(C).
    8. Bian, Chenhang & Cheung, Ka Lung & Chen, Xi & Lee, Chi Chung, 2025. "Integrating microclimate modelling with building energy simulation and solar photovoltaic potential estimation: The parametric analysis and optimization of urban design," Applied Energy, Elsevier, vol. 380(C).

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