Assessment of the Influence of Feed-In Tariffs on the Profitability of European Photovoltaic Companies

Feed-in tariff policies have been the most common and effective tool contributing towards the important growth in photovoltaic solar energy in Europe. The purpose of this study is to analyze their influence on the economic profitability of photovoltaic companies operating in the most characteristic...

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Bibliographic Details
Published in:Sustainability 2018-09, Vol.10 (10), p.3427
Main Authors: Milanés-Montero, Patricia, Arroyo-Farrona, Alberto, Pérez-Calderón, Esteban
Format: Article
Language:English
Subjects:
Alternative energy sources
Economics
Economies of scale
Electricity
Energy consumption
GDP
Greenhouse gases
Gross Domestic Product
Incentives
Longitudinal studies
Market penetration
Market prices
Photovoltaics
Pollutants
Renewable resources
Return on investment
Solar energy
Subsidies
Sustainability
Tariffs
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Summary:Feed-in tariff policies have been the most common and effective tool contributing towards the important growth in photovoltaic solar energy in Europe. The purpose of this study is to analyze their influence on the economic profitability of photovoltaic companies operating in the most characteristic regions, Germany, Italy, France and Spain in the period 2008–2012. Variables characterizing these companies are also included. Regarding the method, a static linear panel data model is used. The results show how feed-in tariffs (FITs henceforth) have in fact had a significant positive influence on the economic profitability of these companies. In addition, the findings suggest that the expansion of these companies in terms of assets implies increased competition in the sector, positively influencing their profitability given the economies of scale generated. Moreover, contrary to expectations, photovoltaic companies with the highest leverage ratios are those with the largest return on investment in the analyzed period, what could be a consequence of their higher possibilities of investing the obtained external funds on PV technology.
ISSN:2071-1050
2071-1050
DOI:10.3390/su10103427