Assessing the Economic Viability of Renewable Energy Subsidies through a Multi-Criteria Decision-Making Framework

Abstract

Even though renewable energy subsidies help the transition to more sustainable energy faster, some still argue that they are not economically sensible because of pressing concerns such as budget cuts, market disruptions and their effect on the planet. A Multi-Criteria Decision-Making (MCDM) process is employed in this study to evaluate the effectiveness of renewable energy subsidies, taking into account economic, environmental, technical, and social aspects. Using AHP and CoCoSo, the analysis ranks key factors such as costs, the time required to recover the investment, the project's ability to limit carbon emissions, and potential employment opportunities. Results of case studies in India and Serbia indicate that solar and wind power are most important due to their low cost and ability to be applied on a wide scale. Financial factors like upfront costs and returns mainly decide subsidies, yet the benefits to the environment and society in the long run are a good reason to continue subsidizing such projects. The concept highlights the need to pick technologies that can balance short-term advantages in growth with goals for a better, more sustainable future. Many policy suggestions focus on adjusting who gets subsidies, improving how markets set prices and increasing collaborations with other countries to address trade disagreements. This method for MCDM provides policymakers with a clear tool that relies on data to develop robust renewable plans that both align with global environmental goals and meet local needs