Feed-in Tariff system in the case of soft harmonisation Brief characterisation:This policy pathway prescribes the EU-wide adoption of a system of fixed feed-in tariffs to support RES-E. Since soft harmonisation is chosen, an EU-wide and national targets for RES deployment by 2030 are set and an EU-wide harmonised support scheme (i.e. the fixed feed-in tariff scheme) aims to provide the necessary basic funding which MSs may complement via additional incentives to stimulate and steer investments in new RES-E installations.

Under soft harmonisation MSs have to implement domestically the support scheme that has been decided at EU level. However, countries may in principle use whatever design element they deem best and support levels may differ across countries. For the modelling exercise the assumption is taken that MSs do only partly make us of their freedom, i.e. support levels are now tailored to their country-specific needs to contribute best to domestic target fulfilment (i.e. higher incentives in countries where target fulfilment appears more challenging).
Since national targets for RES by 2030 are in place under this pathway, RES cooperation comes into play that finally affects the overall cost allocation across MSs – i.e. the ultimate height of support expenditures for RES at country level is defined by national RES deployment and the support expenditures related to that, and, on top of that, the additional revenues (for exporting countries) or additional expenditures (for importing countries) related to RES cooperation.

General notes on the design of the feed-in tariff system:

• A system of fixed feed-in tariffs is implemented. A new installation consequently receives the guaranteed remuneration for its electricity feed-in during the whole duration of support whereby also an inflation adaptation is assumed.
• Support levels (i.e. tariffs) differ by technology. Moreover, for wind onshore and PV a “stepped design” is implemented, meaning that within an efficiency corridor support levels reflect site specifics and a higher remuneration is offered to plants at less suitable sites (i.e. lower full load hours) than for plants at best sites whereby care is taken to assure that revenues remain higher to let investor’s strive for best sites.
• Duration of support is limited to 15 years, i.e. a new installation can only receive financial support during the first 15 years of operation.
• An automatic digression of support levels is foreseen, meaning that in accordance with learning expectations a lower support is guaranteed for a new installation in a certain year than in one year before.

Figure 1c - 6.   Yearly average (2021 to 2030) monetary transfers between Member States related to the support for RES, expressing additional expenditures (+) or income (-) as share of (country-specific) GDP (for the assessed policy pathway 1c (FIT soft))

Note: Additional expenditure or income stems from the underlying cost allocation under a full or medium harmonisation of RES support, or they refer to RES cooperation in the case of soft, minimum or no harmonisation, respectively.

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