Economic analysis of different supporting policies for the production of electrical energy by solar photovoltaics in western European Union countries

Within various renewable energy technologies, photovoltaics (PV) today attracts considerable attention due to its potential to contribute a major share of renewable energy in the future. However, PV market development is, undoubtedly, dependent on the political support of any given country. In this paper, after a brief analysis of national support policies in PV technology in western European Union (EU) countries, the authors perform an economic analysis of the main support mechanisms as implemented in the same countries, based on the calculation of the cash flow, the Net Present Value (NPV) and the Internal Rate of Return (IRR) indices. The analysis shows that in some situations support policies can be inconvenient for the owner of the PV-based generation system and that, in many cases, the differences between the implementation of the same support policy in different countries, can give rise to significantly different results. The analysis carried out in this work could help: to assess the impact of PV energy policies in different western European member states; renewable energy companies to identify potential PV markets and investigate the policy landscape across western EU countries. (C) 2010 Elsevier Ltd. All rights reserved.