Evaluating consumer investments in distributed energy technologies
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Journal Title
Journal ISSN
Volume Title
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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Date
2021-02
Major/Subject
Mcode
Degree programme
Language
en
Pages
12
Series
Energy Policy, Volume 149
Abstract
The adoption of solar photovoltaic and electrical energy storage by end users depends on their economic attractiveness, which is typically assessed with metrics of future cash flow such as Net Present Value (NPV). Yet analyses using NPV typically do not account for the evolution towards low-carbon electricity systems in the short and long term. We show this to be of critical importance for accurately calculating the profitability of these technologies. By linking an energy system model with a power system model, we observe substantial differences between NPV estimates calculated with and without representing potential evolutions of the electricity system. Our results suggest that not accounting for short- and long-run changes in the electricity system could underestimate the NPV of an investment in photovoltaic and storage by around 20%, especially in scenarios with high levels of renewables, moderate flexibility, and high electrification in the energy system. Using system-dependent cash flow metrics can havea major impact on end-users' energy technology profitability.Description
Keywords
Energy storage, Feasibility study, Private investment, Prosumer, Renewable energy integration, Solar PV, System value
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Citation
Castagneto Gissey , G , Zakeri , B , Dodds , P E & Subkhankulova , D 2021 , ' Evaluating consumer investments in distributed energy technologies ' , Energy Policy , vol. 149 , 112008 . https://doi.org/10.1016/j.enpol.2020.112008
