A game‐theory analysis of the subsidy withdrawal policy for China's photovoltaic power generation industry
Abstract Over the past decade, the feed‐in‐tariff (FIT) subsidy policy of China has driven rapid growth in the photovoltaic power generation (PPG) industry. China now boasts the largest installed capacity of PPG around the world. However, the policy‐driven expansion of the PPG industry has not broug...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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Wiley
2021-10-01
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| Series: | IET Renewable Power Generation |
| Subjects: | |
| Online Access: | https://doi.org/10.1049/rpg2.12236 |
| _version_ | 1797995415219470336 |
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| author | Jianliang Wang Xu Geng Hui Hu Wanfang Xiong Kelly Burns |
| author_facet | Jianliang Wang Xu Geng Hui Hu Wanfang Xiong Kelly Burns |
| author_sort | Jianliang Wang |
| collection | DOAJ |
| description | Abstract Over the past decade, the feed‐in‐tariff (FIT) subsidy policy of China has driven rapid growth in the photovoltaic power generation (PPG) industry. China now boasts the largest installed capacity of PPG around the world. However, the policy‐driven expansion of the PPG industry has not brought about a simultaneous improvement in quality. PPG costs remain high and it is difficult to sustain PPG competitiveness. Therefore, it is imperative to gradually withdraw from the implementation of photovoltaic subsidies. Using a game theory approach, this study investigates the impact of subsidy exit policy on China's PPG industry. The results show that stimulating research and development (R&D) can be difficult under current uncertain subsidy withdrawal plan. The government should announce the plan of subsidy reduction with clear adjustment as well as corresponding effective dates. In addition, under the condition of government‐controlled prices, the social welfare of the monopoly market is higher than that in the competitive market. In order to achieve the same technological progress and target output, the total cost (including enterprise cost and government expenditure) in competitive market is higher than that in monopoly market, which is caused by repeated R&D investment and technical cost. Technical cooperation could lower costs and increase profits, and is therefore recommended. |
| first_indexed | 2024-04-11T10:01:15Z |
| format | Article |
| id | doaj.art-f5390510f1744423bfd325c9e4447249 |
| institution | Directory Open Access Journal |
| issn | 1752-1416 1752-1424 |
| language | English |
| last_indexed | 2024-04-11T10:01:15Z |
| publishDate | 2021-10-01 |
| publisher | Wiley |
| record_format | Article |
| series | IET Renewable Power Generation |
| spelling | doaj.art-f5390510f1744423bfd325c9e44472492022-12-22T04:30:25ZengWileyIET Renewable Power Generation1752-14161752-14242021-10-0115133014302410.1049/rpg2.12236A game‐theory analysis of the subsidy withdrawal policy for China's photovoltaic power generation industryJianliang Wang0Xu Geng1Hui Hu2Wanfang Xiong3Kelly Burns4School of Economics and Management China University of Petroleum Beijing ChinaSchool of Economics and Management China University of Petroleum Beijing ChinaEconomic Development Research Centre Wuhan University Hubei ChinaSchool of Economics Huazhong University of Science and Technology Hubei ChinaLow Carbon Economics School Hubei University of Economics Hubei ChinaAbstract Over the past decade, the feed‐in‐tariff (FIT) subsidy policy of China has driven rapid growth in the photovoltaic power generation (PPG) industry. China now boasts the largest installed capacity of PPG around the world. However, the policy‐driven expansion of the PPG industry has not brought about a simultaneous improvement in quality. PPG costs remain high and it is difficult to sustain PPG competitiveness. Therefore, it is imperative to gradually withdraw from the implementation of photovoltaic subsidies. Using a game theory approach, this study investigates the impact of subsidy exit policy on China's PPG industry. The results show that stimulating research and development (R&D) can be difficult under current uncertain subsidy withdrawal plan. The government should announce the plan of subsidy reduction with clear adjustment as well as corresponding effective dates. In addition, under the condition of government‐controlled prices, the social welfare of the monopoly market is higher than that in the competitive market. In order to achieve the same technological progress and target output, the total cost (including enterprise cost and government expenditure) in competitive market is higher than that in monopoly market, which is caused by repeated R&D investment and technical cost. Technical cooperation could lower costs and increase profits, and is therefore recommended.https://doi.org/10.1049/rpg2.12236Solar power stations and photovoltaic power systemsGame theoryPower system management, operation and economics |
| spellingShingle | Jianliang Wang Xu Geng Hui Hu Wanfang Xiong Kelly Burns A game‐theory analysis of the subsidy withdrawal policy for China's photovoltaic power generation industry IET Renewable Power Generation Solar power stations and photovoltaic power systems Game theory Power system management, operation and economics |
| title | A game‐theory analysis of the subsidy withdrawal policy for China's photovoltaic power generation industry |
| title_full | A game‐theory analysis of the subsidy withdrawal policy for China's photovoltaic power generation industry |
| title_fullStr | A game‐theory analysis of the subsidy withdrawal policy for China's photovoltaic power generation industry |
| title_full_unstemmed | A game‐theory analysis of the subsidy withdrawal policy for China's photovoltaic power generation industry |
| title_short | A game‐theory analysis of the subsidy withdrawal policy for China's photovoltaic power generation industry |
| title_sort | game theory analysis of the subsidy withdrawal policy for china s photovoltaic power generation industry |
| topic | Solar power stations and photovoltaic power systems Game theory Power system management, operation and economics |
| url | https://doi.org/10.1049/rpg2.12236 |
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