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

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  • Kildegaard, Arne
  • Wente, Jordan

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.

Suggested Citation

  • Kildegaard, Arne & Wente, Jordan, 2015. "An optimization approach to parallel generation solar PV investments in the U.S.: Two applications illustrate the case for tariff reform," Energy Policy, Elsevier, vol. 87(C), pages 295-302.
    • Handle: RePEc:eee:enepol:v:87:y:2015:i:c:p:295-302
    DOI: 10.1016/j.enpol.2015.09.011
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    References listed on IDEAS

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