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Are small-scale grid-connected photovoltaic systems a cost-effective policy for lowering electricity bills and reducing carbon emissions? A technical, economic, and carbon emission analysis

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  • McHenry, Mark P.

Abstract

This research discusses findings from technical simulations and economic models of 1kWp and 3kWp grid-connected photovoltaic (PV) systems supplying a rural home electricity load in parallel with the electricity network in Western Australia (WA). The technical simulations are based on electricity billing, consumption monitoring, an energy audit data, combined with 15min interval load and PV system performance for commercially available technologies and balance of system components, using long-term meteorological input data. The economic modelling uses 2010 market prices for capital costs, operational costs, electricity tariffs, subsidies, and is based on discounted cash flow analyses which generate a final net present value (NPV) for each system against network electricity costs (in Australian dollars, AUD) over a 15 year investment horizon. The results suggest that current market prices generate a negative NPV (a net private loss), even with the current government subsidies, which lead to higher home electricity costs than conventional network electricity use. Additionally, the private costs of carbon emission mitigation (AUD tCO2-e−1) for the grid-connected PV system simulations and models were around AUD 600-700 tCO2-e−1, a particularly expensive option when compared to existing large-scale renewable energy mitigation activities.

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  • McHenry, Mark P., 2012. "Are small-scale grid-connected photovoltaic systems a cost-effective policy for lowering electricity bills and reducing carbon emissions? A technical, economic, and carbon emission analysis," Energy Policy, Elsevier, vol. 45(C), pages 64-72.
    • Handle: RePEc:eee:enepol:v:45:y:2012:i:c:p:64-72
    DOI: 10.1016/j.enpol.2012.01.036
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