Returns on investment in electricity producing photovoltaic systems under de-escalating feed-in tariffs: The case of Greece

Under the threat of ballooning energy bills, the Greek legal framework supporting the electricity producing photovoltaic systems (PVS) changed in January 2009 from a fixed to a de-escalating feed-in tariff schedule. In this paper we investigate the internal rate of return (IRR) on investing in PVS under the new regulatory environment. We find that the new scheme favours strongly the early entry in the market. Unless there is a significant decrease in the equipment cost over the next decade, entering the market from 2015 onwards will be prohibitive. The bias of the current policy design towards early entry in a rapidly developing set of technologies entails the risk of a lock-up with sub-optimal technological option. This outlines the importance for policy design of linking the rate of feed-in-tariff de-escalation to more realistic expectations regarding the technology learning curve.     

Harmonization of renewable electricity feed-in laws: A comment

This comment aims at critically analyzing some of the economic efficiency issues that are raised in the paper by Muñoz et al. [2007. Harmonization of renewable electricity feed-in laws in the European Union. Energy Policy 35, 3104–3114] on the harmonization of feed-in law schemes for renewable electricity in the European Union. We comment on the choice between green certificate systems and feed-in laws, but pay particular attention to the implementation and design of a harmonized feed-in law scheme. In the comment we argue first that the approach suggested by Muñoz et al. tends to downplay many of the practical difficulties in assessing the real costs facing investors in renewable electricity, not the least since the presence of regulatory uncertainty about the marginal costs of renewable electricity may be essential for the choice between different support systems. Concerning the benefit side of renewable electricity promotion, the Muñoz et al. (2007) paper builds on an interpretation of the EU Renewables Directive that provides plenty of room for national priorities and that therefore essentially implies that harmonized support premiums per se are of little value. We argue instead that a harmonized system should primarily address the international spillover effects from renewable electricity promotion, not the least those related to improved security of supply in Europe. There exists then a strong case for disregarding the specific national benefits of renewable electricity production in the design of harmonized support systems, and for instead considering international—perhaps at the start bilateral—policy support coordination based on entirely uniform support levels.     

On-grid electricity tariffs in China: Development,reform and prospects

With the introduction of market-oriented measures in China's power sector in the mid-1980s, electricity sale prices to the grid companies—on-grid electricity tariffs—became the focus of the energy industry, thus affecting all related stakeholders, including fuel suppliers, power generators and end-use consumers. A number of changes have gradually been undertaken in terms of electricity tariff settings and their implementation to address specific requirements of the expansion of the power industry at each stage of its development. On-grid electricity tariffs had been used as a key lever to attract investment in power generation at an early stage of reform and then to encourage competition in the power industry. In response to the rising concerns about environmental protection and the promotion of clean energy utilisation, tariffs have progressively been developed for renewable electricity generation, which has contributed to massive expansion of the renewable power industry in China. This paper reviews key milestones of the development of on-grid electricity tariffs in China, examines the tariff-setting mechanisms of coal-fired power plants and renewable power generation, analyses the factors associated with the adjustments of the tariff levels and discusses the options for further reform and more effective electricity pricing.     

Expanding photovoltaic penetration with residential distributed generation from hybrid solar photovoltaic and combined heat and power systems

The recent development of small scale combined heat and power (CHP) systems has provided the opportunity for in-house power backup of residential-scale photovoltaic (PV) arrays. This paper investigates the potential of deploying a distributed network of PV + CHP hybrid systems in order to increase the PV penetration level in the U.S. The temporal distribution of solar flux, electrical and heating requirements for representative U.S. single family residences were analyzed and the results clearly show that hybridizing CHP with PV can enable additional PV deployment above what is possible with a conventional centralized electric generation system. The technical evolution of such PV + CHP hybrid systems was developed from the present (near market) technology through four generations, which enable high utilization rates of both PV-generated electricity and CHP-generated heat. A method to determine the maximum percent of PV-generated electricity on the grid without energy storage was derived and applied to an example area. The results show that a PV + CHP hybrid system not only has the potential to radically reduce energy waste in the status quo electrical and heating systems, but it also enables the share of solar PV to be expanded by about a factor of five.     

The impact of rate design and net metering on the bill savings from distributed PV for residential customers in California

Net metering has become a widespread mechanism in the U.S. for supporting customer adoption of distributed photovoltaics (PV), but has faced challenges as PV installations grow to a larger share of generation in a number of states. This paper examines the value of the bill savings that customers receive under net metering, and the associated role of retail rate design, based on a sample of approximately two hundred residential customers of California's two largest electric utilities. We find that the bill savings per kWh of PV electricity generated varies by more than a factor of four across the customers in the sample, which is largely attributable to the inclining block structure of the utilities' residential retail rates. We also compare the bill savings under net metering to that received under three potential alternative compensation mechanisms, based on California's Market Price Referent (MPR). We find that net metering provides significantly greater bill savings than a full MPR-based feed-in tariff, but only modestly greater savings than alternative mechanisms under which hourly or monthly net excess generation is compensated at the MPR rate.     

Impact of residential photovoltaic power systems on the electric utility in Cairo, Egypt

The impact of utility-interactive residential photovoltaic (PV) power systems on the electric utility was studied. Power flow analyses were performed before and after the introduction of PV, on a subtransmission and distribution network model of an actual residential utility feeder serving a suburban area of Helwan in Cairo, Egypt. The changes in bus voltages and utility power factor were used to assess the impacts caused by the PV introduction. PV systems were examined at different penetration levels and were introduced in the low- and high-voltage buses of the distribution circuit. PV power factors as low as 0·7 were used to account for various power conditioner designs. PV-utility interconnection at the high-voltage distribution level is recommended since it results in acceptable voltage regulation throughout the network as well as a good utility power factor.     

Making the connection: The relationship between fuel poverty,electricity disconnection,and prepayment metering

Fuel poverty, or inability to afford adequate heating for a reasonable outlay of expenditure, is a significant and under-researched problem in New Zealand. The connection between fuel poverty, and electricity disconnection or ‘self-disconnection’ is analysed for four cities using prepayment metering to pay for electricity. A price comparison analysis on a government-sponsored website showed that prepayment metering was more expensive than other payment options. This website analysis was supplemented by qualitative data from older people with chronic respiratory disease expressing their views about electricity disconnection and prepayment metering. We show that prepayment metering for electricity is more expensive than other payment methods in New Zealand and that older people’s insights provide valuable context to these issues. Under the present payment schedule, the use of prepayment metering to pay for electricity is not a suitable policy instrument to address fuel poverty, which remains problematic. The deregulated electricity market continues to lead to increases in the real price of residential electricity and in the number of people in fuel poverty. We offer policy suggestions for reducing fuel poverty in New Zealand.     

Dynamic pricing of electricity for residential customers: the evidence from Michigan

The rollout of smart meters has enabled the provision of dynamic pricing to residential customers. However, doubts remain whether households can respond to time-varying price signals and that is preventing the full-scale rollout of dynamic pricing and the attainment of economic efficiency. Experiments are being conducted to test price responsiveness. We analyze data from a pilot in Michigan which featured two dynamic pricing rates and an enabling technology. Unlike most other pilots, it also included a group of “information only” customers who were provided information on time-varying prices but billed on standard rates. Similarly, unlike most other pilots, it also included two control groups, one of whom knew they were in the pilot and one of whom did not. This was designed to test for the presence of a Hawthorne effect. Consistent with the large body of experimental literature, we find that customers, including low-income participants, do respond to dynamic pricing. We also find that the response to critical peak pricing rates is similar to the response to peak time rebates, consistent with the finding of one prior experiment but inconsistent with the finding of two prior experiments. We also find that the “information only” customers respond to the provision of pricing information but at a substantially lower rate than the customers on dynamic pricing. We find that the response to enabling technology is muted. We do not find any evidence to suggest that a Hawthorne effect existed in this experiment.     

Price freezes, durables, and residential electricity demand. Evidence from Greater Buenos Aires

This paper examines the determinants of residential electricity demand in Greater Buenos Aires between 1997 and 2006. During the second half of this period, residential electricity tariffs remained nominally fixed, while rising incomes increased sales of durables. Our study is one of few that use monthly data to examine the contribution of prices to residential consumption growth, and it appears to be the first time-series study to explicitly consider the impact of air conditioners on residential demand. Results indicate that durables have an impact on residential electricity demand. Simulations illustrate how prices, income, and durables impact future demand.     

Performance analysis of photovoltaic systems: A review

In this paper, a thorough review of photovoltaic and photovoltaic thermal systems is done on the basis of its performance based on electrical as well as thermal output. Photovoltaic systems are classified according to their use, i.e., electricity production and thermal applications along with the electricity production. The application of various photovoltaic systems is also discussed in detail. The performance analysis including all aspects, e.g., electrical, thermal, energy, and exergy efficiency are also discussed. A case study for PV and PV/T system based on exergetic analysis is presented.     

Energy consumption of a residential building: comparison of conventional and RES-based systems

The energy needs of a typical one-family house in the Thessaloniki area for heating, cooling and domestic hot water production are calculated. The calculations are based on the typical average daily consumption of hot water and on the degree-day method for heating and cooling. The results are finally translated into thermal energy consumption, assuming the typical Greek situation (heating with diesel oil boilers and conventional radiators, cooling with local air-to-air split-type heat pumps and hot water production with electric heaters). The same energy needs are assumed to be covered by a vertical closed loop ground heat exchanger combined with a water-to-water heat pump system with fan-coils for heating and cooling and a thermosyphonic solar system for domestic hot water production. The ground heat exchanger/heat pump system efficiency is determined using data from an existing and continuously monitored similar system installed in the broader area of Thessaloniki. The solar system load coverage is calculated using the f-chart method. The energy consumption of the renewable energy systems is calculated and compared to that of the conventional system. The results prove that significant energy savings can be achieved.     

Estimating short and long-term residential demand for electricity: New evidence from Sri Lanka

This study investigates the short-run dynamics and long-run equilibrium relationship between residential electricity demand and factors influencing demand – per capita income, price of electricity, price of kerosene oil and price of liquefied petroleum gas – using annual data for Sri Lanka for the period, 1960–2007. The study uses unit root, cointegration and error-correction models. The long-run demand elasticities of income, own price and price of kerosene oil (substitute) were estimated to be 0.78, ? 0.62, and 0.14 respectively. The short-run elasticities for the same variables were estimated to be 0.32, ? 0.16 and 0.10 respectively. Liquefied petroleum (LP) gas is a substitute for electricity only in the short-run with an elasticity of 0.09. The main findings of the paper support the following (1) increasing the price of electricity is not the most effective tool to reduce electricity consumption (2) existing subsidies on electricity consumption can be removed without reducing government revenue (3) the long-run income elasticity of demand shows that any future increase in household incomes is likely to significantly increase the demand for electricity and (4) any power generation plans which consider only current per capita consumption and population growth should be revised taking into account the potential future income increases in order to avoid power shortages in the country.     

Territorial competitiveness of the stand alone photovoltaic systems versus grid electricity supply. A method and a study based on geographical information systems

Stand alone photovoltaic power systems (SAPPS) are a natural option for application in the electrification of remote areas which are outside the grid-connected electricity supply system (GCESS). The proposed method is based on three ambits: photovoltaic and grid sizing, economic analysis, and the integration of information and development of models within geographical information systems (GIS). The results of a case study carried out in the south of Spain (province of Córdoba) show that for a domestic electricity consumption (5 kW h/day) SAPPS are economically more competitive in 69% of the total area of this region.     

Performance of off-grid residential solar photovoltaic power systems using five solar tracking modes in Kunming,China

This paper compares the performance of a 2.02 kW_p off-grid residential solar photovoltaic (PV) power system using PVSYST simulation software for a household in Kunming, Yunnan province, China. The monthly available solar energy; missing energy; array, final, and reference yields, performance ratio; and array capture and system losses were analyzed for five solar tracking modes: fixed tilted plane, seasonal tilt adjustment, horizontal axis tracking, vertical axis tracking, and dual axis tracking. Although there were some similar aspects across the five systems, minimum available solar energy (2461 kWh/y) and maximum missing energy (134.68 kWh/y) were obtained using the fixed tilted plane system (tilt angle = 25°, azimuth angle = 0°), whereas maximum available solar energy (3081 kWh/y) and minimum missing energy (48.53 kWh/y) in October were obtained using the dual axis tracking system. Average monthly performance ratio was maximal for the fixed tilted plane system (0.689), and minimal for the dual axis tracking system (0.596).     

Distributed photovoltaic generation and energy storage systems: A review

Currently, in the field of operation and planning of electrical power systems, a new challenge is growing which includes with the increase in the level of distributed generation from new energy sources, especially renewable sources. The question of load redistribution for better energetic usage is of vital importance since these new renewable energy sources are often intermittent. Therefore, new systems must be proposed which ally energy storage with renewable energy generators for reestablishment of grid reliability. This work presents a review of energy storage and redistribution associated with photovoltaic energy, proposing a distributed micro-generation complex connected to the electrical power grid using energy storage systems, with an emphasis placed on the use of NaS batteries. These systems aim to improve the load factor, considering supply side management, and the offer of backup energy, in the case of demand side management.     

Energy production of photovoltaic systems: Fixed, tracking, and concentrating

This work compares the energy production (EP) of four photovoltaic system configurations: fixed, 1-axis and 2-axis tracking flat plate, and concentrating photovoltaics (CPV). The EP comparison is based on real performance data from systems installed in Spain in 2009. These systems are located close to each other but house different configurations. Many of the systems analyzed are new installations in 2008, including two of the largest CPV systems in the world that together have 9.3 MW and represent more than 50% of the world's total CPV. The EP analysis shows: (1) compared with the fixed flat plate systems, 1-axis and 2-axis tracking flat plate systems have 22.3% and 25.2% gain in the annual EP, respectively. These real EP gains are less than 32.1% for 1-axis and 38.7% for 2-axis tracking, which are the predicted gains when only considering the difference of captured illumination by these configurations (based on the data from Photovoltaic Geographical Information System (PVGIS)). (2) The EP from CPV systems is quite close to that from fixed flat plate systems. This differs from the predicted 16.1% gain from CPV when only considering the illumination difference. Besides comparing the energy production, the performance ratio (PR) is also estimated and analyzed for the different configurations, based on the best available irradiation data. PR measures the agreement between the operation of a real system and of an ideal system that only considers the nominal module efficiency loss. The analysis shows the PR decreases in the order: fixed, 1-axis, 2-axis tracking flat plate, CPV.     

Stimulating the diffusion of photovoltaic systems: A behavioural perspective

This paper first discusses consumer motives for adopting photovoltaic systems (PV systems) from a behavioural-theoretical perspective. Different motives are discussed within a framework of underlying needs and the time sensitivity of various outcomes. Next, empirical data are presented concerning the motives of buyers of PV systems after a promotional and support campaign in the city of Groningen (the Netherlands). Financial support and general problem awareness are found to be critical motives, but the (strong) positive effects of information meetings, technical support meetings and social networks are also identified. Conclusions focus on the critical motives for adopting a PV system, and suggestions are presented concerning policy measures to stimulate the further diffusion of PV systems.     

The effect of price on the residential demand for electricity: A statistical study

The statistics of the demand for electricity and the relationship between the price of electricity and the demand are examined through analysis of the monthly consumption statistics of a community of owner-occupied, almost identical townhouses. The average yearly demand for electricity grew from 1971 until 1973 and then decreased by less than 2% a year for the next three years. In spite of price increases, demand for electricity during the heating season (the units are heated by a forced-air natural gas furnace) increased steadily but slightly over the six years of observation. A simple statistical model is used to split the cooling season demand for electricity into air-conditioner demand and the demand for lights and appliances. The non-cooling portion of the demand decreased from 1974 to 1975, but otherwise increased each year from 1971 to 1976. The portion of the demand that we estimate is used for cooling appears to have increased between 1971 and 1974 and then decreased between 1974 and 1976. The evolution of the electricity-rate schedule for this community is considered and then two simple statistical models, which relate demand to price, are estimated. These indicate that, although the marginal price has doubled (in current dollars), these changes in price have had little effect on demand.     

A feasibility study of grid-connected photovoltaic systems in Istanbul,Turkey

The application of renewable energy sources in electric power systems is increasing. There is a growing need for economic evaluation to inform photovoltaic (PV) allocation decisions for a range of decision-makers. In this study, power output and temperature data collected from PV modules in Istanbul, Turkey in 2009 have been analyzed to determine solar power generation potential. In addition to the measurements, technical and commercial parameters were also used to perform the evaluation. Different tariffs such as time-of-use and feed-in tariffs were considered in this study.     

Effects of construction activities on residential electricity consumption: Evidence from Singapore's public housing estates

This study aims to empirically test the effects of negative environmental externalities (i.e. noise pollution) due to construction activities within half to one kilometer (km) radius and how households react to such externalities by increasing the use of air-conditioners to mitigate noise from the construction work. We use a unique dataset of electricity consumption by public housing residents in Singapore measured at the building level and merge it with the dataset of construction sites for the periods from 2009 to 2011. Using a difference-in-differences approach, we find that electricity consumption by the households living close to the construction sites increases by 6% compared to the households who are not affected by noises from construction sites during the construction periods, after controlling for building and month of the year fixed effects. The results remain robust after controlling for spatial autocorrelated lag and error terms. The economic cost of the construction externalities for each household amounts to approximately S$98 per annum. We also find that the increases in electricity consumption of the affected households were persistent, and the electricity consumption of the affected households did not revert to the pre-construction levels, after the removal of the negative externality.