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Assessment of the Influence of Feed-In Tariffs on the Profitability of European Photovoltaic Companies

Author

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  • Patricia Milanés-Montero

    (Accounting and Financial Department, Faculty of Economics, University of Extremadura, 06006 Badajoz, Spain)

  • Alberto Arroyo-Farrona

    (Accounting and Financial Department, Faculty of Economics, University of Extremadura, 06006 Badajoz, Spain
    Researcher in a project developed in the University of Extremadura.)

  • Esteban Pérez-Calderón

    (Accounting and Financial Department, Faculty of Economics, University of Extremadura, 06006 Badajoz, Spain)

Abstract

Feed-in tariff policies have been the most common and effective tool contributing towards the important growth in photovoltaic solar energy in Europe. The purpose of this study is to analyze their influence on the economic profitability of photovoltaic companies operating in the most characteristic regions, Germany, Italy, France and Spain in the period 2008–2012. Variables characterizing these companies are also included. Regarding the method, a static linear panel data model is used. The results show how feed-in tariffs (FITs henceforth) have in fact had a significant positive influence on the economic profitability of these companies. In addition, the findings suggest that the expansion of these companies in terms of assets implies increased competition in the sector, positively influencing their profitability given the economies of scale generated. Moreover, contrary to expectations, photovoltaic companies with the highest leverage ratios are those with the largest return on investment in the analyzed period, what could be a consequence of their higher possibilities of investing the obtained external funds on PV technology.

Suggested Citation

  • Patricia Milanés-Montero & Alberto Arroyo-Farrona & Esteban Pérez-Calderón, 2018. "Assessment of the Influence of Feed-In Tariffs on the Profitability of European Photovoltaic Companies," Sustainability, MDPI, vol. 10(10), pages 1-16, September.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3427-:d:172129
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