Combining feed-in tariffs and net-metering schemes to balance development in adoption of photovoltaic energy: Comparative economic assessment and policy implications for European countries

In the last fifteen years, Europe has been involved in the major development of photovoltaic (PV) solar energy. The Kyoto Protocol requirements and the European Union (EU) directives to promote the use of renewable energy sources (RES) together with environmental policies introduced for the development and use of alternative energies have generated a large number of market opportunities for this sector. Differences in the application of energy policies have caused significant imbalances in electricity systems and distortion of electricity prices. The main concern of governments is to define the support schemes to be used and how to combine them in the most profitable manner. The aim of this paper is to provide a comparative cost-effectiveness assessment using feed-in tariffs (FiT) and net-metering (NM) schemes in some representative EU countries. The authors have developed an economic model to evaluate the profitability of PV projects combining these support schemes. Results show not only the circumstances under which solar energy is economically profitable, but also the kind of PV systems, locations, minimum levels of tariff prices and specific combination of support schemes that should be promoted.