A Review of Feed-In Tariff Model (FIT) for Photovoltaic (PV)

This paper based on the literature survey and describes how the Feed-In Tariff (FIT) for Photo Voltaic (PV) applied in some countries with various formula, and mechanism, which is connected to the grid system. Base on a literature survey, the majority of European Country has applied a various model of FIT which contains elements of subsidies, incentives, and remuneration (generally refer to social costs and environmental costs) because it aims to spur renewable energy growth including PV. The design of FIT is highly impacting the society in terms of electricity cost (i.e. the cost of balancing and back up for the grid system due to the unstable characteristic electricity supply of PV). The FIT implementations always change either by agreement between the European countries or the regulations of each country, but in general tends to decline every year. The purpose is to study the applied Feed-in Tariff (FIT) of Photo Voltaic (PV) and explore the possibility of developing the new formula of FIT and looking for an opportunity to round off the formula based on the characteristic of the PV and be able to be implemented in Indonesia. The author proposes a model of dynamic FIT based on the unit commitment of PV entering the grid system. Penalties will be applied if the PV fails to fulfill the unit commitment. Further research must be carried out to determine the exact form of the formula so that it can be implemented in Indonesia. To the best of the authors’ knowledge, this paper is first of its kind in the literature, which presents several FIT strategies and provides a number of possible research directions listed in open research challenges.