Investment appraisal of a small, grid-connected photovoltaic plant under the Serbian feed-in tariff framework

Serbian government has recently introduced the system of feed-in tariffs for electricity generated from renewable sources. The proposed feed-in tariff for photovoltaic electricity is set to 0.23€/kWh paid for 12 years, with the PV electricity produced after the first 12 years being sold at the grid electricity market price for the rest of the plant lifetime. Although such FIT could have been justified by the small, average retail grid electricity price of just 0.054€/kWh for Serbian households, the investment appraisal of a real case of 2.82kWp PV power plant in two Serbian cities of Zlatibor and Negotin, clearly illustrates that the proposed FIT framework is not sufficient to attract investments into PV in Serbia. In the second part of the paper, we have analyzed alternative, more reasonable feed-in tarrif frameworks, with the goal of selecting those able to sustain the PV adoption and diffusion in Serbia.