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Revisiting the techno-economic analysis process for building-mounted, grid-connected solar photovoltaic systems: Part two - Application

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  • Sommerfeldt, Nelson
  • Madani, Hatef

Abstract

Part One in this two part paper identified Monte Carlo analysis as an improved approach over traditional deterministic techno-economic methods for solar PV prosumers in deregulated markets. In this paper a novel Monte Carlo methodology is described and demonstrated through a case study for the Swedish residential sector, which includes a review of relevant market, climate, and policy conditions, their use in determining inputs, and the probabilistic results. The probability of profitability (PoP) is introduced as an indicator in conjunction with result distributions. The results show that under current policy conditions, Swedish PV investors with well positioned buildings have a 71% chance of making a 3% real return on investment, and virtually no chance of losing their original investment. Without subsidies the PoP drops to 8%. In none of the simulated cases was any of the original investment lost. The PoP is most sensitive to the capital subsidy and the uncertainty of market based, long-term support is less critical to the chances of a successful investment. Given the current market conditions, Swedish PV prosumers can expect a return on investment. The decision to install will also depend on the probability of achieving their desired profitability, which Monte Carlo analysis quantifies well.

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  • Sommerfeldt, Nelson & Madani, Hatef, 2017. "Revisiting the techno-economic analysis process for building-mounted, grid-connected solar photovoltaic systems: Part two - Application," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1394-1404.
    • Handle: RePEc:eee:rensus:v:74:y:2017:i:c:p:1394-1404
    DOI: 10.1016/j.rser.2017.03.010
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    7. Roberts, Mike B. & Bruce, Anna & MacGill, Iain, 2019. "Impact of shared battery energy storage systems on photovoltaic self-consumption and electricity bills in apartment buildings," Applied Energy, Elsevier, vol. 245(C), pages 78-95.
    8. Bertolini, Marina & D'Alpaos, Chiara & Moretto, Michele, 2018. "Do Smart Grids boost investments in domestic PV plants? Evidence from the Italian electricity market," Energy, Elsevier, vol. 149(C), pages 890-902.
    9. Feldman, David & Jones-Albertus, Rebecca & Margolis, Robert, 2020. "Quantifying the impact of R&D on PV project financing costs," Energy Policy, Elsevier, vol. 142(C).
    10. Lee, Minhyun & Hong, Taehoon & Jeong, Jaewook & Jeong, Kwangbok, 2018. "Development of a rooftop solar photovoltaic rating system considering the technical and economic suitability criteria at the building level," Energy, Elsevier, vol. 160(C), pages 213-224.
    11. Lee, Minhyun & Hong, Taehoon & Jeong, Kwangbok & Kim, Jimin, 2018. "A bottom-up approach for estimating the economic potential of the rooftop solar photovoltaic system considering the spatial and temporal diversity," Applied Energy, Elsevier, vol. 232(C), pages 640-656.
    12. Thebault, Martin & Desthieux, Gilles & Castello, Roberto & Berrah, Lamia, 2022. "Large-scale evaluation of the suitability of buildings for photovoltaic integration: Case study in Greater Geneva," Applied Energy, Elsevier, vol. 316(C).
    13. Poppi, Stefano & Sommerfeldt, Nelson & Bales, Chris & Madani, Hatef & Lundqvist, Per, 2018. "Techno-economic review of solar heat pump systems for residential heating applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 22-32.
    14. Tomasz Sikorski & Michał Jasiński & Edyta Ropuszyńska-Surma & Magdalena Węglarz & Dominika Kaczorowska & Paweł Kostyła & Zbigniew Leonowicz & Robert Lis & Jacek Rezmer & Wilhelm Rojewski & Marian Sobi, 2019. "A Case Study on Distributed Energy Resources and Energy-Storage Systems in a Virtual Power Plant Concept: Economic Aspects," Energies, MDPI, vol. 12(23), pages 1-21, November.
    15. Sommerfeldt, Nelson & Lemoine, Ida & Madani, Hatef, 2022. "Hide and seek: The supply and demand of information for household solar photovoltaic investment," Energy Policy, Elsevier, vol. 161(C).

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