Journal
ENERGY POLICY
Volume 167, Issue -, Pages -Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.enpol.2022.113044
Keywords
China; Feed-in tariff; Solar PV; Panel model
Funding
- National Social Science Fund of China [18VXK002]
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China's renewable energy investments are increasing, but significant investment is still needed to achieve carbon reduction goals. The study finds that subsidies and cost reduction are major drivers of utility-scale solar PV capacity growth in China, but subsidies to distributed solar PV investments also have a crowding-out effect on utility-scale PV investments.
China has become a global manufacturing hub for many industries; recently, thanks to various renewable energy support schemes, we also see the country's growing share in renewable energy investments. However, significant renewable energy investment is still required to achieve China's ambitious carbon targets: achieving carbon peak by 2030, and carbon neutrality by 2060. Based on province-level data covering the whole period of feed-in tariff (FIT) support mechanism, this paper explores the effect of renewable energy subsidies, costs and other economic factors on the installed capacity of utility-scale solar PV (UPV) in China. Our findings indicate that the FIT mechanism in tandem with a significant reduction in renewable energy investment costs have been the major drivers of China's dramatic increase in UPV investments. However, subsidies to distributed solar PV investments also have a crowding-out effect on UPV investments, which result in a statistically significant co-opetition relationship between UPV and Distributed PV. Furthermore, heterogeneity in provincial power consumption and energy supply also affect these investment dynamics.
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