Journal of the Korean Solar Energy Society (한국태양에너지학회 논문집)

The Korean Solar Energy Society (한국태양에너지학회)
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The Policy Impact of Renewable Energy Subsidies on Solar PV: The Case of Renewable Portfolio Standard in Korea

국내 태양광 발전 보조금 제도의 정책 효과: 공급의무화제도 사례를 중심으로

  • Kwon, Tae-Hyeong (Department of Public Administration, Hankuk University of Foreign Studies)
  • 권태형 (한국외국어대학교 행정학과)
  • Received : 2016.12.09
  • Accepted : 2016.02.21
  • Published : 2017.02.28
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Abstract

In 2012, Korea introduced a Renewable Portfolio Standard (RPS) scheme, replacing the Feed-in Tariff (FIT) scheme as a market support policy of renewable energy in the electricity market. RPS is to allocate obligatory quota of renewable energy sources for electricity suppliers, whereas FIT is to guarantee high prices for electricity from renewable energy sources. This study examines the effect of this policy change on solar photovoltaic market. According to the study, solar PV market grew fast under FIT as well as under RPS. However, under RPS the size of subsidy for solar PV suppliers was shrunk substantially. In addition, market risk increased severly under RPS due to the volatility of price of renewable energy certificate (REC) as well as of the electricity market price. The small and medium suppliers of solar PV were suffered the most severly from these policy effects. Therefore, the policy reform of RPS is needed to alleviate the market risk of small and medium suppliers of solar PV.

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