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The financials of constructing a solar PV for net-zero energy operations on college campuses

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  • Kwan, Calvin Lee
  • Kwan, Timothy J.

Abstract

The LACCD has a goal of establishing net-zero energy operations across its nine campuses. The project faces many challenges, including limited open areas for installing solar PV, increasing energy consumption challenges associated with campus energy growth and the high cost of installing solar PV. A previous study by Kwan and Hoffmann (2010) found that the LACCD would need to install a 9.5 MW solar PV array in order to meet total campus energy demand on a college campus through the year 2020. This paper attempts to evaluate the financial feasibility of such a project, taking into account the current local, state and federal renewable energy incentives available. We find that despite the availability of financial incentives by local municipal utility companies including installation rebates and net metering, the cost of electricity generated by solar PV still remains approximately 30% higher than electricity generated by fossil fuels. We also find that the optimal solar PV array size from a financial standpoint is one that is sized to generate and meet all electrical demand during sunlight hours. Any array larger than this yields diminishing returns. Finally our analysis examined the influence of per kW installation cost and found that only when prices dropped to $3.00 per installed watt did a net-zero energy solar PV array have an NPV of 0.

Suggested Citation

  • Kwan, Calvin Lee & Kwan, Timothy J., 2011. "The financials of constructing a solar PV for net-zero energy operations on college campuses," Utilities Policy, Elsevier, vol. 19(4), pages 226-234.
    • Handle: RePEc:eee:juipol:v:19:y:2011:i:4:p:226-234
    DOI: 10.1016/j.jup.2011.07.003
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    References listed on IDEAS

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    1. Kahn, Edward, 2008. "Avoidable Transmission Cost is a Substantial Benefit of Solar PV," The Electricity Journal, Elsevier, vol. 21(5), pages 41-50, June.
    2. Jacobsson, Staffan & Johnson, Anna, 2000. "The diffusion of renewable energy technology: an analytical framework and key issues for research," Energy Policy, Elsevier, vol. 28(9), pages 625-640, July.
    3. Drennen, Thomas E & Erickson, Jon D & Chapman, Duane, 1996. "Solar power and climate change policy in developing countries," Energy Policy, Elsevier, vol. 24(1), pages 9-16, January.
    4. Roth, Ian F. & Ambs, Lawrence L., 2004. "Incorporating externalities into a full cost approach to electric power generation life-cycle costing," Energy, Elsevier, vol. 29(12), pages 2125-2144.
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    2. Charani Shandiz, Saeid & Rismanchi, Behzad & Foliente, Greg, 2021. "Energy master planning for net-zero emission communities: State of the art and research challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    3. Gaiser, Kyle & Stroeve, Pieter, 2014. "The impact of scheduling appliances and rate structure on bill savings for net-zero energy communities: Application to West Village," Applied Energy, Elsevier, vol. 113(C), pages 1586-1595.
    4. Fahd Diab & Hai Lan & Lijun Zhang & Salwa Ali, 2015. "An Environmentally-Friendly Tourist Village in Egypt Based on a Hybrid Renewable Energy System––Part Two: A Net Zero Energy Tourist Village," Energies, MDPI, vol. 8(7), pages 1-17, July.

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