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PV adoption: the role of distribution tariffs under net metering

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  • Gautier, Axel
  • Jacqmin, Julien

Abstract

The deployment of decentralized productions units (DPU) like rooftop solar panels is a major challenge for a transition towards greener energy sources. Under a net metering system where the meter runs backward when there is excessive PV production, the electricity produced by a solar panel is valued at the retail price. Higher retail prices thus encourage the deployment of DPU. To identify this relationship, we use data from Wallonia where tariffs are paid on a mostly volumetric base and where there are 13 different tariff zones. Using various specifications, our results suggest that in a municipality where the distribution tariff is one eurocent per kWh higher, the investment in solar PV is, all else equal, around 8% higher.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gautier, Axel & Jacqmin, Julien, 2020. "PV adoption: the role of distribution tariffs under net metering," LIDAM Reprints CORE 3120, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:3120
    Note: In : Journal of Regulatory Economics, Vol. 57, no.1, p. 53-73 (2019)
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    Cited by:

    1. Hindriks, Jean & Serse, Valerio, 2022. "The incidence of VAT reforms in electricity markets: Evidence from Belgium," International Journal of Industrial Organization, Elsevier, vol. 80(C).
    2. Fikru, Mahelet G. & Canfield, Casey, 2022. "Demand for renewable energy via green electricity versus solar installation in Community Choice Aggregation," Renewable Energy, Elsevier, vol. 186(C), pages 769-779.
    3. Miguel Manuel de Villena & Raphael Fonteneau & Axel Gautier & Damien Ernst, 2019. "Evaluating the Evolution of Distribution Networks under Different Regulatory Frameworks with Multi-Agent Modelling," Energies, MDPI, vol. 12(7), pages 1-15, March.
    4. Bruno Moreno Rodrigo de Freitas, 2020. "Quantifying the effect of regulated volumetric electriciy tariffs on residential PV adoption under net metering scheme," Working papers of CATT hal-02976874, HAL.
    5. De Groote, Olivier & Gautier, Axel & Verboven, Frank, 2024. "The political economy of financing climate policy — Evidence from the solar PV subsidy programs," Resource and Energy Economics, Elsevier, vol. 77(C).
    6. Axel Gautier & Julien Jacqmin, 2019. "Une nouvelle tarification des réseaux pour favoriser la transition énergétique," LIDAM Reprints CORE 2995, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. Rydehell, Hanna & Lantz, Björn & Mignon, Ingrid & Lindahl, Johan, 2024. "The impact of solar PV subsidies on investment over time - the case of Sweden," Energy Economics, Elsevier, vol. 133(C).
    8. Moncada, J.A. & Tao, Z. & Valkering, P. & Meinke-Hubeny, F. & Delarue, E., 2021. "Influence of distribution tariff structures and peer effects on the adoption of distributed energy resources," Applied Energy, Elsevier, vol. 298(C).
    9. Ansarin, Mohammad & Ghiassi-Farrokhfal, Yashar & Ketter, Wolfgang & Collins, John, 2022. "A review of equity in electricity tariffs in the renewable energy era," Renewable and Sustainable Energy Reviews, Elsevier, vol. 161(C).
    10. Fink, Johanna, 2024. "Do separate bidding zones within countries create imbalances in PV uptake? Evidence from Sweden," Applied Energy, Elsevier, vol. 374(C).
    11. Bergaentzle, Claire & Gunkel, Philipp Andreas, 2022. "Cross-sector flexibility, storage investment and the integration of renewables: Capturing the impacts of grid tariffs," Energy Policy, Elsevier, vol. 164(C).
    12. Hashemi, Majid & Jenkins, Glenn & Milne, Frank, 2023. "Rooftop solar with net metering: An integrated investment appraisal," Renewable and Sustainable Energy Reviews, Elsevier, vol. 188(C).
    13. Johanna Fink, 2023. "Can the creation of separate bidding zones within countries create imbalances in PV uptake? Evidence from Sweden," Papers 2312.16161, arXiv.org.
    14. Bruno Moreno Rodrigo de Freitas, 2020. "Quantifying the effect of regulated volumetric electriciy tariffs on residential PV adoption under net metering scheme," Working Papers hal-02976874, HAL.
    15. Matthew E. Oliver & Juan Moreno-Cruz & Kenneth T. Gillingham, 2025. "Microeconomics of the Solar Rebound Under Net Metering," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 12(5), pages 1317-1353.
    16. Soheil Mohseni & Jay Rutovitz & Heather Smith & Scott Dwyer & Farzan Tahir, 2023. "Economic Viability Assessment of Neighbourhood versus Residential Batteries: Insights from an Australian Case Study," Sustainability, MDPI, vol. 15(23), pages 1-27, November.
    17. Lyu, Yuan & He, Yongxiu & Li, Shanzi & Zhou, Jinghan & Li, Bo, 2024. "Impact of grid connection cost channeling mechanisms on the development of distributed photovoltaic: The case of China," Energy Policy, Elsevier, vol. 187(C).
    18. Falk, Martin Thomas & Hagsten, Eva, 2025. "The impact of rising electricity prices on demand for photovoltaic solar systems," Energy Economics, Elsevier, vol. 147(C).
    19. Shimada, Hideki & Honda, Tomonori, 2022. "What drives households’ choices of residential solar photovoltaic capacity?," Energy Policy, Elsevier, vol. 168(C).
    20. Freitas Gomes, Icaro Silvestre & Perez, Yannick & Suomalainen, Emilia, 2020. "Coupling small batteries and PV generation: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).
    21. Lyu, Yuan & He, Yongxiu & Li, Shanzi & Zhou, Jinghan & Tian, BingYing, 2024. "Channeling approach of prosumer connection costs considering regional differences in China — Evolutionary game among distributed photovoltaic entities," Energy, Elsevier, vol. 289(C).
    22. Wu, Jingwen & Qi, Yiyun & Guan, Xinyi & Wu, Xiaomin & Li, Hui, 2024. "Farmers’ attitudes and adoption preferences toward household solar photovoltaics: A survey from Guangdong Province in China," Renewable Energy, Elsevier, vol. 225(C).
    23. Ansarin, Mohammad & Ghiassi-Farrokhfal, Yashar & Ketter, Wolfgang & Collins, John, 2022. "Economic inefficiencies of pricing distributed generation under novel tariff designs," Applied Energy, Elsevier, vol. 313(C).
    24. Manuel de Villena, Miguel & Jacqmin, Julien & Fonteneau, Raphael & Gautier, Axel & Ernst, Damien, 2021. "Network tariffs and the integration of prosumers: The case of Wallonia," Energy Policy, Elsevier, vol. 150(C).
    25. Arnold, Fabian & Jeddi, Samir & Sitzmann, Amelie, 2022. "How prices guide investment decisions under net purchasing — An empirical analysis on the impact of network tariffs on residential PV," Energy Economics, Elsevier, vol. 112(C).

    More about this item

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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