An optimization approach to parallel generation solar PV investments in the U.S.: Two applications illustrate the case for tariff reform

Arne Kildegaard and Jordan Wente

Energy Policy, 2015, vol. 87, issue C, 295-302

Abstract: We construct a model to optimize the economics of distributed generation photovoltaics (DGPV) for a parallel generation (behind-the-meter) application. Applying the model to the short-interval load and insolation data for two similar dairy operations in the U.S. Upper Midwest region, we find that highly site-specific differences in parameters lead to strikingly divergent results. Operating behind-the-meter strongly rewards real-time concurrence between on-site generation and on-site load. Compared to operating under a value of solar tariff (VOST) or net energy metering (NEM), we argue that parallel generation tariffs amplify the existing, irreducible uncertainties of project economics, and discourage DGPV investment.

Keywords: Photovoltaics; Renewable energy; Net energy metering; Value of solar tariffs (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:87:y:2015:i:c:p:295-302

DOI: 10.1016/j.enpol.2015.09.011

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