Impact of Green Electricity Certificate on the economic viability of urban rooftop photovoltaics and local renewable energy consumption targets

doi:10.12006/j.issn.1673-1719.2025.063

Abstract

Abstract:

Green Electricity Certificate (GEC) offers new economic incentives for rooftop photovoltaic (PV) projects, significantly enhancing investment attractiveness. Additionally, the inclusion of traded GEC electricity volumes in the government energy-saving evaluation metrics motivates local governments to advance renewable energy development. This study selected 100 cities across 9 provinces, integrating local meteorological conditions, rooftop area, electricity consumption load, and PV policies, to conduct simulation modeling and cost-benefit analysis for both commercial and residential buildings. The results indicate that GEC significantly improves the economic viability of rooftop PV projects, with 20% of cities transitioning from non-economical to economical status. The average net present value (NPV) across all cities increases by CNY 215 million, while the internal rate of return (IRR) and dynamic payback period (DPBP) also show improvements. Notably, residential buildings, due to their lower self-consumption rates and higher grid-fed electricity participating in GEC trading, experience more substantial revenue increases. From a regional perspective, economically underdeveloped areas, characterized by lower self-consumption rates, benefit more from GEC revenues, demonstrating that GEC can help narrow the economic disparity in rooftop PV adoption among cities and promote balanced regional renewable energy development. Additionally, local consumption of rooftop PV could contribute a median of 58.75% (1.25%-264.23%) of the non-hydro renewable energy consumption targets, highlighting the critical role of rooftop PV in achieving local renewable energy goals. Sensitivity analysis indicates that cities with lower self-consumption rates are more affected by GEC price fluctuations. This study provides a scientific basis for optimizing distributed PV deployment and achieving renewable energy consumption targets at the provincial level.

Key words: Urban rooftop photovoltaic (PV), Green Electricity Certificate (GEC), Economic viability, Renewable electricity quota

DUAN Shu-Yang, WU Jia-Qi, LIU Jun-Ling. Impact of Green Electricity Certificate on the economic viability of urban rooftop photovoltaics and local renewable energy consumption targets[J]. Climate Change Research, 2025, 21(6): 839-852.

Figures/Tables 10

Fig. 1 Analysis framework for the impact of Green Electricity Certificate (GEC) on the economic viability and renewable energy consumption of urban rooftop photovoltaics

Table 1 Data sources and assumptions

Fig. 2 Increase in LCOE of residential buildings after the implementation of GEC

Fig. 3 Incremental change of the IRR of residential buildings (a) after the implementation of GEC and their self-consumption rates (b)

Table 2 The 20 cities with the most significant changes in rooftop photovoltaic (PV) Internal Rate of Return (IRR)

Fig. 4 Changes in the Net Present Value (NPV) of residential buildings after the implementation of GEC

Fig. 5 Changes in the Dynamic Investment Pay-back Period (DPBP) of residential buildings after the implementation of GEC

Table 3 Clustering results of IRR and NPV performance of rooftop PV in different cities under the influence of GEC

Table 4 Potential contribution of residential and commercial rooftop photovoltaics to the renewable energy power consumption obligation targets

Fig. 6 Changes in the economic indicators with a 10% increase (a) and a 10% decrease (b) in GEC prices

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