Spatial and temporal variation in the value of solar power across United States electricity markets

Patrick R. Brown and Francis M. O'Sullivan

Renewable and Sustainable Energy Reviews, 2020, vol. 121, issue C

Abstract: The cost of utility-scale photovoltaics (PV) has declined rapidly over the past decade. Yet increased renewable electricity generation, decreased natural gas prices, and deployment of emissions-control technology across the United States have led to concurrent changes in electricity prices and power system emissions rates, each of which influence the value of PV electricity. An ongoing assessment of the economic competitiveness of PV is therefore necessary as PV cost and value continue to evolve. Here, we use historical nodal electricity prices, capacity market prices, marginal power system emissions rates of CO2 and air pollutants, and weather data to model the energy, capacity, health, and climate value of PV electricity at over 10 000 locations across six U.S. Independent System Operators (ISOs) from 2010 to 2017. On the energy and capacity markets, transmission congestion in some locations and years results in PV revenues that are more than double the median across the relevant ISO. While the marginal public health benefits from avoided SO2, NOx, and PM2.5 emissions have declined over time in most ISOs, monetizing the health benefits of PV generation in 2017 would increase median PV energy revenues by 70% in MISO and NYISO and 100% in PJM. Given 2017 PV costs, electricity prices, and grid conditions, PV breaks even at 30% of modeled locations on the basis of energy, capacity, and health benefits, at 75% of modeled locations with the addition of a 50 $/ton CO2 price, and at 100% of modeled locations with a 100 $/ton CO2 price. These results suggest that PV cost decline has outpaced value decline over the past decade, such that in 2017 the net benefits of utility-scale PV outweigh the cost at the majority of modeled locations.

Keywords: Solar energy; Photovoltaics; Value of solar; Locational marginal price; Distributed energy resources; Merit order effect; Air pollution; Capacity value; Resource adequacy (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1364032119308020
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:121:y:2020:i:c:s1364032119308020

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/bibliographic
http://www.elsevier. ... 600126/bibliographic

DOI: 10.1016/j.rser.2019.109594

Access Statistics for this article

Renewable and Sustainable Energy Reviews is currently edited by L. Kazmerski

More articles in Renewable and Sustainable Energy Reviews from Elsevier
Bibliographic data for series maintained by Catherine Liu ().