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Benefits and costs of a utility-ownership business model for residential rooftop solar photovoltaics

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  • Galen Barbose

    (Lawrence Berkeley National Laboratory)

  • Andrew J. Satchwell

    (Lawrence Berkeley National Laboratory)

Abstract

The rapid growth of rooftop solar photovoltaic systems can pose a number of financial challenges for electric utility shareholders and their customers. One potential pathway to resolving these perceived challenges involves allowing utilities to own and operate rooftop solar systems. However, the financial benefits and costs of this business model are not well understood. Here we model the financial performance of a large-scale utility-owned residential rooftop solar programme. Over a 20 yr period, the programme increases shareholder earnings by 2–5% relative to a no-solar scenario, compared to a 2% earnings loss when an equivalent amount of rooftop solar is instead owned by non-utility parties. Such a programme could therefore be attractive from the perspective of utility investors. The impacts on utility customers, however, are more mixed, with average bills of non-solar customers increasing by 1–3% compared to the no-solar scenario, similar to the 2% increase under traditional, non-utility-ownership structures.

Suggested Citation

  • Galen Barbose & Andrew J. Satchwell, 2020. "Benefits and costs of a utility-ownership business model for residential rooftop solar photovoltaics," Nature Energy, Nature, vol. 5(10), pages 750-758, October.
    • Handle: RePEc:nat:natene:v:5:y:2020:i:10:d:10.1038_s41560-020-0673-y
    DOI: 10.1038/s41560-020-0673-y
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    Cited by:

    1. Wu, Zhaoyuan & Chen, Zili & Wang, Congyi & Zhou, Ming & Wang, Jianxiao & Chen, Lin, 2024. "Unlocking the potential of rooftop solar panels: An incentive rate structure design," Energy Policy, Elsevier, vol. 190(C).
    2. Nguyen, Hai-Tra & Safder, Usman & Loy-Benitez, Jorge & Yoo, ChangKyoo, 2022. "Optimal demand side management scheduling-based bidirectional regulation of energy distribution network for multi-residential demand response with self-produced renewable energy," Applied Energy, Elsevier, vol. 322(C).
    3. Chavid Leewiraphan & Nipon Ketjoy & Prapita Thanarak, 2023. "Business Perspectives of Distributed System Operators for Solar Rooftop-as-a-Service," Energies, MDPI, vol. 17(1), pages 1-15, December.
    4. Lu-Miao Li & Peng Zhou & Wen Wen, 2023. "Distributed Renewable Energy Investment: The Effect of Time-of-Use Pricing," The Energy Journal, , vol. 44(5), pages 251-276, September.
    5. Sommerfeldt, Nelson & Pearce, Joshua M., 2023. "Can grid-tied solar photovoltaics lead to residential heating electrification? A techno-economic case study in the midwestern U.S," Applied Energy, Elsevier, vol. 336(C).
    6. Yin, Hui & Zhou, Kaile, 2022. "Performance evaluation of China's photovoltaic poverty alleviation project using machine learning and satellite images," Utilities Policy, Elsevier, vol. 76(C).
    7. Bergaentzle, Claire & Gunkel, Philipp Andreas, 2022. "Cross-sector flexibility, storage investment and the integration of renewables: Capturing the impacts of grid tariffs," Energy Policy, Elsevier, vol. 164(C).
    8. Du, Hua & Han, Qi & de Vries, Bauke & Sun, Jun, 2024. "Community solar PV adoption in residential apartment buildings: A case study on influencing factors and incentive measures in Wuhan," Applied Energy, Elsevier, vol. 354(PA).
    9. Lu-Miao Li, Peng Zhou, and Wen Wen, 2023. "Distributed Renewable Energy Investment: The Effect of Time-of-Use Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5).
    10. Dutt, Dwarkeshwar & Ranjan, Abhishek, 2022. "Towards a just energy transition in Delhi: Addressing the bias in the rooftop solar market," Energy Policy, Elsevier, vol. 160(C).
    11. Jiehui Yuan & Wenli Yuan & Juan Yuan & Zhihong Liu & Jia Liao & Xunmin Ou, 2023. "Policy Recommendations for Distributed Solar PV Aiming for a Carbon-Neutral Future," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    12. Yang, Peiwen & Fang, Debin & Wang, Shuyi, 2022. "Optimal trading mechanism for prosumer-centric local energy markets considering deviation assessment," Applied Energy, Elsevier, vol. 325(C).
    13. Marina Bertolini & Gregorio Morosinotto, 2023. "Business Models for Energy Community in the Aggregator Perspective: State of the Art and Research Gaps," Energies, MDPI, vol. 16(11), pages 1-26, June.

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