Subsidy Policies and Economic Analysis of Photovoltaic Energy Storage Integration in China

Wenhui Zhao, Rong Li () and Shuan Zhu
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Wenhui Zhao: College of Economics and Management, Shanghai University of Electric Power, Shanghai 200090, China
Rong Li: College of Economics and Management, Shanghai University of Electric Power, Shanghai 200090, China
Shuan Zhu: Shanghai Qiyuan Green Power Technology Co., Ltd., The Green Energy Transportation Industry Innovation Center of SPIC, Shanghai 200090, China

Energies, 2024, vol. 17, issue 10, 1-24

Abstract: In the context of China’s new power system, various regions have implemented policies mandating the integration of new energy sources with energy storage, while also introducing subsidies to alleviate project cost pressures. Currently, there is a lack of subsidy analysis for photovoltaic energy storage integration projects. In order to systematically assess the economic viability of photovoltaic energy storage integration projects after considering energy storage subsidies, this paper reviews relevant policies in the Chinese photovoltaic energy storage market. It analyzes the cost and revenue composition of photovoltaic energy storage integration projects, and constructs a system dynamics model for the levelized cost of electricity (LCOE) of such projects. Taking a specific photovoltaic energy storage project as an example, this paper measures the levelized cost of electricity and the investment return rate under different energy storage scenarios. Combining energy storage allocation ratios and internal rate of return indicators, this paper analyzes the net present value of photovoltaic energy storage integration projects under different subsidy standards. The results indicate that, while the current energy storage subsidy policies positively stimulate photovoltaic energy storage integration projects, they exhibit a limited capacity to cover energy storage investment costs, thereby failing to incentivize capital market participation in the construction of such projects. Rational allocation of energy storage capacity and optimization of corresponding subsidy policies are crucial prerequisites for enhancing the economic viability and widespread adoption of photovoltaic energy storage integration projects. This study not only aids in investment decision making for photovoltaic power stations but also contributes to the formulation of energy storage subsidy policies.

Keywords: photovoltaic energy storage integration; LCOE; net present value; energy storage subsidy; system dynamics (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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