Solar collective self-consumption: Economic analysis of a policy mix

Idiano D'Adamo, Massimo Gastaldi and Piergiuseppe Morone

Ecological Economics, 2022, vol. 199, issue C

Abstract: Solar photovoltaic (PV) systems can play a key role in ecosystems by satisfying the energy needs of people and businesses, helping countries become energy independent and propelling nations towards a climate-neutral future. Within this context, collective self-consumption (CSC) represents a new challenge, anchored in a new conception of the prosumer. The present work aims at calculating the economic profitability of PV systems with respect to both household and non-household self-consumers. The methodology is based on the calculation of net present value (NPV), with break-even point (BEP) analysis applied to the percentage of self-consumed energy. As economic viability is dependent on the specific policy tool(s) available, the analysis is applied to the Italian context, considering both a tax deduction of 110% over 5 years and a CSC subsidy of 100 €/MWh. The findings demonstrate economic profitability in multiple scenarios, strongly linked to the percentage of self-consumed energy. The mix of policy tools significantly influences the results and generates BEPs in the range of 8–13% (calculated in terms of the share of self-consumed energy) and NPVs ranging from 1035 to 3178 €/kW for 30–60% self-consumption. Profit distribution scenarios among renewables self-consumers (RSCs) and policy recommendations are provided to foster RSC development, and thereby make residents responsible for their country's energy transition.

Keywords: Collective self-consumption; Economic analysis; Photovoltaic; Policy tools; Subsidies (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:199:y:2022:i:c:s0921800922001422

DOI: 10.1016/j.ecolecon.2022.107480

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