Residential photovoltaic worth : a summary assessment

Abstract

Two critical perspectives have been addressed by the analyses of residential photovoltaic worth. For the researcher and designer have been established allowable costs. For the homeowner and institutional decision-makers have been identified investment figures of merit. The first allowable cost figure was established in 197J and set at $0.50/Wp (1976$) for the PV module component alone. This is very nearly the median of allowable costs projected from todays more refined analyses. These show allowable installed system costs ranging from $1.50/Wp to $4.00/Wp (1980 $), depending upon certain critical variables. The more critical variables are few, and are locally defined: level of solar insolation, local utility rates, and locally available tax credit/subsidies (in addition to the federal). Other parameters that are critical, but more predictable (and hence embedded in the analysis) are the PV array efficiency, utility buyback rate, utility rate escalation, and homeowner discount rate.

One concern that appears to impact heavily on residential PV economics, and that has not been treated widely in the literature, is whether homeowners will be taxed at their ordinary income tax rate for electricity sold to the utility. If so, will it be for all PV electricity produced (requiring 2 meters, as in simultaneous purchase and sale), all PV energy in excess of instantaneous load, or on the basis of net energy sold over some pre-established tine period (utility billing period, tax period, etc.). Assumptions here are critical in the final analysis.

With regards to special applications, the simplest are the most surviving. With higher anticipated utility buyback rates, batteries do nothing to enhance the value of PV. Photovoltaics attached to thermal collectors are sub-optimal compared to side by side systems. New construction applications for a simple utility interconnect system offer cost savings over typical retrofit installations.

In matching industry expected costs with the latest assessment of investor allowable costs, one suspects that the residential market will begin to accelerate around 1990. It will happen first in those areas of high solar insolation, high utility electric rates and significant investment incentives (tax credits or others). An analysis of current trends shows that these breakeven years for residential PV should be welcomed by a ready institutional climate.