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As the solar photovoltaic (PV) matures, the economic feasibility of PV projects are increasingly being evaluated using the levelized cost of electricity (LCOE) generation in order to be compared to other electricity generation technologies. Unfortunately, there is lack of clarity of reporting assumptions, justifications and degree of completeness in LCOE calculations, which produces widely varying and contradictory results. This paper reviews the methodology of properly calculating the LCOE for solar PV, correcting the misconceptions made in the assumptions found throughout the literature. Then a template is provided for better reporting of LCOE results for PV needed to influence policy mandates or make invest decisions. A numerical example is provided with variable ranges to test sensitivity, allowing for conclusions to be drawn on the most important variables. Grid parity is considered when the LCOE of solar PV is comparable with grid electrical prices of conventional technologies and is the industry target for cost-effectiveness. Given the state of the art in the technology and favorable financing terms it is clear that PV has already obtained grid parity in specific locations and as installed costs continue to decline, grid electricity prices continue to escalate, and industry experience increases, PV will become an increasingly economically advantageous source of electricity over expanding geographical regions.
Plug and play solar photovoltaic (PV) systems are affordable, easy to install and portable grid-tied solar electric systems, which can be purchased and installed by an average prosumer (producing consumer). The combination of recent technical/safety analysis and trends in other advanced industrialized nations, indicate that U.S. electrical regulations may allow plug and play solar in the future. Such a shift in regulations could radically alter the current PV market. This study provides an estimate of this new U.S. market for plug and play PV systems if such regulations are updated by investigating personal financial decision making for Americans. The potential savings for the prosumer are mapped for the U.S. over a range of scenarios. The results show the total potential U.S. market of over 57 GW, which represents an opportunity for sales for retailers from $14.3–$71.7 billion depending on the capital cost of plug and play solar systems ($0.25-$1.25/W). These systems would generate ∼108,417,000 MWh/year, which is 4 times the electricity generated from U.S. solar in 2015. This distributed solar energy would provide prosumers approximately $13 billion/year in cost savings, which would be expected to increase by about 3% per year over the year lifetime of the systems.
The technological development and economic of scale for solar photovoltaic (PV), batteries and combined heat and power (CHP) have led to the technical potential for a mass-scale transition to off-grid home electricity production for a significant number of utility customers. However, economic projections on complex hybrid systems utilizing these three technologies is challenging and no comprehensive method is available for guiding decision makers. This paper provides a new method of quantifying the economic viability of off-grid PV+battery+CHP systems by calculating the levelized cost of electricity (LCOE) of the technology to be compared to centralized grid electricity. The analysis is inherently conservative as it does not include the additional value of the heat form the CHP unit. A case study for residential electricity and thermal demand in an extreme worst case environment (Houghton, Michigan) is provided to demonstrate the methodology. The results of this case study show that with reasonable economic assumptions and current costs, PV+battery+CHP systems already provide a potential source of profit for some consumers to leave the grid. A sensitivity analysis for LCOE of such a hybrid system was then carried out on the capital cost of the three energy sub-systems, capacity factor of PV and CHP, efficiency of the CHP, natural gas rates, and fuel consumption of the CHP. The results of the sensitivity provide decision makers with clear guides to the LCOE of distributed generation with off-grid PV+battery+CHP systems and offer support to preliminary analysis that indicated a potential increase in grid defection in the U.S. in the near future.
In order to meet global energy demands with clean renewable energy such as with solar photovoltaic (PV) systems, large surface areas are needed because of the relatively diffuse nature of solar energy. Much of this demand can be matched with aggressive building integrated PV and rooftop PV, but the remainder can be met with land-based PV farms. Using large tracts of land for solar farms will increase competition for land resources as food production demand and energy demand are both growing and vie for the limited land resources. This land competition is exacerbated by the increasing population. These coupled land challenges can be ameliorated using the concept of agrivoltaics or co-developing the same area of land for both solar PV power as well as for conventional agriculture. In this paper, the agrivoltaic experiments to date are reviewed and summarized. A coupled simulation model is developed for both PV production (PVSyst) and agricultural production (Simulateur mulTIdisciplinaire les Cultures Standard (STICS) crop model), to gauge the technical potential of scaling agrivoltaic systems. The results showed that the value of solar generated electricity coupled to shade-tolerant crop production created an over 30% increase in economic value from farms deploying agrivoltaic systems instead of conventional agriculture. Utilizing shade tolerant crops enables crop yield losses to be minimized and thus maintain crop price stability. In addition, this dual use of agricultural land can have a significant effect on national PV production. The results showed an increase in PV power between over 40 and 70 GW if lettuce cultivation alone is converted to agrivoltaic systems in the U.S. It is clear, further work is warranted in this area and that the outputs for different crops and geographic areas should be explored to ascertain the potential of agrivoltaic farming throughout the globe.
Renewable and Sustainable Energy Reviews
Economic Viability of Captive Off-grid Solar Photovoltaic and Diesel Hybrid Energy Systems for the Nigerian Private Sector2019 •
It is well established that lack of both electric supply capacity and reliability weaken the Nigerian economy. Recently, the reduction in solar photovoltaic (PV) costs along with the technical potential to couple PV to hybrid battery and diesel generators provides Nigerian businesses with an opportunity to reduce operating costs while defecting from the grid. This study investigates the potential of using off-grid hybrid energy systems for private industries within and near Lagos state currently with relatively high daily electricity demands that are met with supply through captive diesel generation. The results based on simulations of six industry sector load profiles developed from surveys found solar PV and diesel hybrid energy systems are economically viable for a wide array of industries in the Nigerian private sector including real estate, education, banking, automobile, hospitality and production. Five of the six sectors had discounted payback times for the systems under a year and ROIs >100%. The results established that the levelized cost of electricity is lower for every sector analysed with inclusion of solar PV, lower still with coupling of batteries and more reliable than the current grid-provided electricity. Nigeria as a whole will also benefit from widespread adoption of solar hybrid systems, as it will assist the balance of trade by reducing refined petroleum imports. In conclusion, the results of this study make it clear that every scale of Nigerian businesses could increase profitability with the use of solar hybrid systems. Highlights • Nigerian private sector does not need to rely on expensive diesel fuel for energy needs • Using batteries in hybrid solar photovoltaic (PV) + diesel systems reduces LCOE • Solar PV adoption is economically viable, offering ROIs >100% for five subsectors • Results show high ROI and low discount payback for all-good indicators for lenders • Security of solar PV infrastructure and increase awareness are key to investment
High demand for photovoltaic (PV), battery, and small-scale combined heat and power (CHP) technologies are driving a virtuous cycle of technological improvements and cost reductions in off-grid electric systems that increasingly compete with the grid market. Using a case study in the Upper Peninsula of Michigan, this paper quantifies the economic viability of off-grid PV+battery+CHP adoption and evaluates potential implications for grid-based utility models. The analysis shows that already some households could save money by switching to a solar hybrid off-grid system in comparison to the effective electric rates they are currently paying. Across the region by 2020, 92% of seasonal households and ~75% of year-round households are projected to meet electricity demands with lower costs. Furthermore, ~65% of all Upper Peninsula single-family owner-occupied households will both meet grid parity and be able to afford the systems by 2020. The results imply that economic circumstances could spur a positive feedback loop whereby grid electricity prices continue to rise and increasing numbers of customers choose alternatives (sometimes referred to as a " utility death spiral "), particularly in areas with relatively high electric utility rates. Utility companies and policy makers must take the potential for grid defection seriously when evaluating energy supply strategies.
The economics in the U.S. of solar photovoltaic (PV) systems is changing rapidly as the cost per unit power of PV modules has dropped quickly. These costs reductions have two important results: marked decrease in levelized cost of electricity (LCOE) into ranges competitive or better than traditional electricity-generation technologies and the economic role of racking has been gaining prominence relative to that of modules. As the relative importance of costs of PV racking has been marginal historically, there has been relatively little progress on reducing the materials and costs associated with it, which has caused racking to contribute to a significant portion of costs of entire PV systems. In order to overcome this challenge this study investigates a novel low-weight PV racking system for commercial rooftops based on crossed cables (X-wires) and compares it to racking systems already available on the market on capital costs, labor costs for installation, and technical specifications such as adaptability and power packing factor. The results of over 80% cost reduction and 33% increase in power density are presented and conclusions are drawn about the potential for tension-based racking systems to further reduce total PV systems costs on commercial flat roof tops resulting in LCOE savings of $0.01–$0.02/kW h.
SSRN Electronic Journal
WACC the Dog: The Effect of Financing Costs on the Levelized Cost of Solar PV Power2000 •
Thin film solar photovoltaic technologies contribute significantly to PV installations annually. Although thin films have lost market share in recent years, they have nonetheless grown at a robust rate of 24% between 2004 and 2014. Advantages such as lower cost per watt, ease of manufacturing, lower materials consumption among others continue to interest installers and developers. In this paper, we use performance and financial data from two 4 kWp thin film technologies – Amorphous Silicon (a-Si) and Copper Indium disulfide (CIS) – installed at the Kwame Nkrumah University of Science and Technology Kumasi Ghana to conduct a comparative techno-economic analysis. The cost and performance of a-Si results in a LCOE of €0.28/kWh compared with €0.41/kWh obtained for CIS. At installed cost of €3601.95/kW and €3576.25/kW for a-Si and CIS respectively, both technologies, however, do not compare favourably with existing tariffs on grid-based electricity for the non-residential sector – which pays the highest tariffs. Investment support of 63% and 44% would be required for CIS and a-Si respectively to be competitive with grid for the commercial sector.
The aim of this study is to assess the technical, economical and environmental aspects on the application of the solar energy technology in Southeast Sulawesi, a developing province in eastern part of Indonesia. Mathematical models of the solar radiation falling on a tilted surface, the levelised cost of energy, and the solar lifecycle greenhouse gas and land use equivalent are employed to perform the assessments under a scenario of 5% solar power contribution in the electricity generation mix. The result shows that the solar technology incorporated by tracking system generates the high annual energy generated. Under some technical and economical scenarios, it is possible for the technology to obtain lower energy costs than the solar feed-in-tariff and the electricity production costs from other sources. The solar power not only generates low carbon emission, but also requires less land use, relatively to the availability land in this province.
Renewable Energy
The Potential for Grid Defection of Small and Medium Sized Enterprises Using Solar Photovoltaic, Battery and Generator Hybrid Systems2019 •
Grid-tied solar photovoltaic (PV) systems enable lower cost electricity for small and medium size enterprises (SMEs) than they are currently paying for grid electricity in the U.S. These economic realities threaten conventional electric utilities, which have begun manipulating rate structures to reduce the profitability of distributed generation (DG), as well as putting arbitrary caps on DG in their service territories. SMEs may reduce electricity costs, if they can grid defect with hybrid captive power systems made up of solar, battery and generator subsystems. This paper analyzes the technical and economic viability for hybrid solar systems deployed in the commercial sector to enable self-generation. Specifically, for the first time, the economics of grid defection are analyzed for three case studies of SMEs in the northern U.S., which represent a challenging technical case because of long dark winters, but also have high utility costs. The results of the simulations make it clear that grid defection is already viable for SMEs with the current prices for all components in the solar hybrid system. These results were consistent across scale, load-profile, and utility rate. These economic projections included no government incentives or subsidies and can thus be considered extremely conservative for the specific case studies. Policy changes are discussed for electric utilities to avoid the potential of a utility death spiral in this and similar performing locations.

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IJIRAE:: AM Publications,India
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