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Economic analysis of photovoltaic systems for the residential market under China's new regulation

Sandy Rodrigues, Xiaoju Chen and F. Morgado-Dias

Energy Policy, 2017, vol. 101, issue C, 467-472

Abstract: China has recently changed its regulation for producing energy from photovoltaic solar panels in order to encourage the use of the solar resource. This new regulation started with offering subsidies at a national level and this was later followed by local subsidies in addition to the national one. Being a large country, China has regions with good solar exposure and others with poor exposure. Each region has a different electricity price and the energy is purchased based on the Grid Coal Power electricity price that also varies throughout the country. In this work we analyze the economic profitability of different regions considering the solar radiation levels, savings in self-consumption, cash flows from injecting power into the grid and local prices for installations to show that the best return is obtained in the places with better solar radiation or where the electricity price is higher. The regional Feed-In tariffs help to compensate for lower radiation levels but do not make these regions very attractive from an investment perspective.

Keywords: China; Feed in tariff; Photovoltaic; Discounted Payback Period; Net Present Value; The Internal Rate of Return (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:enepol:v:101:y:2017:i:c:p:467-472