Feed-in tariff for renewable energy in Germany and Hong Kong

Abstract

Feed-in tariff (FiT) is the most widely used renewable energy policy mechanism in the world to encourage the deployment of renewable energy (RE), accounting for an increasing share of RE development through various financial incentives. In this work, the possibility of such policy being utilized to promote RE technologies in Hong Kong is discussed through comparison with the policy results obtained in Germany. We find that the energy portion as well as the market structure between two countries have large difference. Specific local conditions such as poverty gap, lack of space and ways to boost investment confidence should also be taken into account when considering the implementation of FiT in Hong Kong. It is necessary to find a balance between government’ payment, the companies’ cost and the social welfare due to the drawbacks of FiT with high cost for the government, relatively fixed price on the market and burden on the consumer. After the concept of FiT been carefully put to practice, the increasing participation of the masses would be beneficial for both individuals and social welfare. The participants could earn extra money from the policy and the society benefits from an increasing RE usage which also comes with environmental benefits. It is encouraged for individuals in Hong Kong to be a part of RE network and further promote RE applications to push such schemes forward.