Market viability of photovoltaic plants: merit order effect approach

We consider future prospects of solar energy in Central Europe. We first provide the description of the Czech energy situation with emphasize on photovoltaic energy. After that we estimate the merit-order effect. In last five years the Czech wholesale price of electricity decreased on average by 0.009 EUR/MWh. The total average merit-order effect over five-year period was 4.544 EUR/MWh. The effects were more pronounced in later years. New Czech solar projects are not viable without subsidies and new projects would not be able to profitable without public support. Thus solar power plants do not appear to be a reasonable choice in the Czech Republic. Nevertheless, low Czech wholesale electricity prices make all electricity sources not competitive