Impact of fuel-dependent electricity retail charges on the value of net-metered PV applications in vertically integrated systems

Alexandros I. Nikolaidis, Andreas Milidonis () and Charalambos A. Charalambous

Energy Policy, 2015, vol. 79, issue C, 150-160

Abstract: Retail electricity charges inevitably influence the financial rationale of using net-metered photovoltaic (PV) applications since their structure as well as their level may vary significantly over the life-cycle of a customer-sited PV generation system. This subsequently introduces a further uncertainty for a ratepayer considering a net-metered PV investment. To thoroughly comprehend this uncertainty, the paper employs a top-down approach – in vertically integrated environments – to model the volatility of partially hedged electricity charges and its subsequent impact on the value of bill savings from net-metered PV systems. Besides the utility's pricing strategy and rate structures, particular emphasis is given in modeling the fossil fuel mix component that introduces a significant source of uncertainty on electricity charges and thus on the value of bill savings of net-metered, customer-sited, PV applications.

Keywords: Distributed power generation; Net metering; Photovoltaic systems; Risk assessment (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:79:y:2015:i:c:p:150-160

DOI: 10.1016/j.enpol.2015.01.010

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