Saturday, June 18, 2011

Feed-in tariffs for photovoltaics: Learning by doing in Germany?
Abstract: This paper examines the potential effects of Germany’s feed-in tariff policy for small roof-top solar PV systems installed between 2009 and 2030. Employing a partial equilibrium approach, we evaluate the policy by weighing the benefits from induced learning and avoided environmental externalities against the social costs of promoting residential PV. We use a dynamic optimization model that maximizes social welfare by accounting for learning-by-doing, technology diffusion, and yield-dependent demand. We find a wide range of effects on welfare, from net social costs of 2,014 million € under a “business as usual” scenario to 7,586 million € of net benefits under the positive prospects of PV’s development. Whereas the “business as usual” scenario underestimates actual price reductions, the positive scenario mirrors recent price developments and feed-in tariffs in the German residential PV market.

► We model feed-in tariff policies for small roof-top PV systems in Germany.
► Our partial equilibrium approach maximizes social benefits between 2009 and 2030.
► We find welfare effects between costs of 2 bn € and benefits of 7.6 bn €.

by Robert Wand 1 and Florian Leuthold 2
1. Berlin University of Technology, Faculty of Business and Economics, Workgroup for Infrastructure Policy, Germany
2. Dresden University of Technology, Faculty of Business and Economics, Chair of Energy Economics, Germany
Applied Energy via Elsevier Science Direct
Article in Press, Corrected Proof ; Available online 15 June 2011

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