Financial Instruments for Renewable Energy Incentives: a Cluster-Based Analysis of Feed-in Tariffs and Power Purchase Agreements

Анотація

Financial instruments play a crucial role in accelerating the global shift toward renewable energy by reducing investment risks and encouraging long-term project viability. Mechanisms such as Feed-in Tariffs (FITs) and Power Purchase Agreements (PPAs) have become central to attracting private capital and ensuring stable returns in the renewable energy sector. The global transition toward decarbonisation has intensified the demand for effective, data-driven renewable energy policy design. This study aims to identify and compare international patterns in renewable energy incentives by analysing FIT and PPA lengths. Using k-means clustering on a dataset covering 67 countries and seven renewable energy sources over the period 2000–2019, the research groups countries based on the structure and strength of their incentive schemes. The results reveal eight distinct clusters reflecting different policy approaches, from high-support frameworks (e.g., Portugal) to minimal or inconsistent schemes. Some clusters prioritise long-term investment security through extended PPA durations, while others focus on targeted financial incentives for specific technologies. These findings demonstrate that cluster-based analysis provides valuable insights for benchmarking national policies and identifying transferable best practices in global renewable energy strategy

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