The future of the Feed-in Tariff (FiT) scheme in Europe: The case of photovoltaics

The key objective of this study is the examination of the regulatory and policy framework of the feed-in-tariff (FiT) scheme, specifically its effect on both the electricity pricing as well as the local and European renewable energy sources (RES) market, and accordingly the definition of its feasibility as a scheme for the further development and promotion of renewable energy technologies (RETs). This work discusses the FiT scheme implementation for photovoltaics (PVs) in four case study countries - Denmark, Germany, Cyprus, and Spain. A model describing the conditions under which a FiT scheme is led to collapse is also introduced and a parametric analysis towards revealing the sensitivity of the different parameters affecting it, is delivered. The study concludes with significant policy implications that should be considered for future implementation of the scheme. For the prevention of the collapse of the scheme, the tariff's value ought to be determined by each country's government based on a set of influencing factors including the operational, capital and investment costs of each RET, the standard cost of renewable energy (RE) generation and the avoidance cost, which would be regularly reviewed depending on the excess of the annual capacity.