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Solar collective self-consumption: Economic analysis of a policy mix

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  • D'Adamo, Idiano
  • Gastaldi, Massimo
  • Morone, Piergiuseppe

Abstract

Solar photovoltaic (PV) systems can play a key role in ecosystems by satisfying the energy needs of people and businesses, helping countries become energy independent and propelling nations towards a climate-neutral future. Within this context, collective self-consumption (CSC) represents a new challenge, anchored in a new conception of the prosumer. The present work aims at calculating the economic profitability of PV systems with respect to both household and non-household self-consumers. The methodology is based on the calculation of net present value (NPV), with break-even point (BEP) analysis applied to the percentage of self-consumed energy. As economic viability is dependent on the specific policy tool(s) available, the analysis is applied to the Italian context, considering both a tax deduction of 110% over 5 years and a CSC subsidy of 100 €/MWh. The findings demonstrate economic profitability in multiple scenarios, strongly linked to the percentage of self-consumed energy. The mix of policy tools significantly influences the results and generates BEPs in the range of 8–13% (calculated in terms of the share of self-consumed energy) and NPVs ranging from 1035 to 3178 €/kW for 30–60% self-consumption. Profit distribution scenarios among renewables self-consumers (RSCs) and policy recommendations are provided to foster RSC development, and thereby make residents responsible for their country's energy transition.

Suggested Citation

  • D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2022. "Solar collective self-consumption: Economic analysis of a policy mix," Ecological Economics, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:ecolec:v:199:y:2022:i:c:s0921800922001422
    DOI: 10.1016/j.ecolecon.2022.107480
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    2. Best, Rohan & Marrone, Mauricio & Linnenluecke, Martina, 2023. "Meta-analysis of the role of equity dimensions in household solar panel adoption," Ecological Economics, Elsevier, vol. 206(C).
    3. Dasí-Crespo, Daniel & Roldán-Blay, Carlos & Escrivá-Escrivá, Guillermo & Roldán-Porta, Carlos, 2023. "Evaluation of the Spanish regulation on self-consumption photovoltaic installations. A case study based on a rural municipality in Spain," Renewable Energy, Elsevier, vol. 204(C), pages 788-802.
    4. D'Adamo, Idiano & Mammetti, Marco & Ottaviani, Dario & Ozturk, Ilhan, 2023. "Photovoltaic systems and sustainable communities: New social models for ecological transition. The impact of incentive policies in profitability analyses," Renewable Energy, Elsevier, vol. 202(C), pages 1291-1304.
    5. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe & Ozturk, Ilhan, 2022. "Economics and policy implications of residential photovoltaic systems in Italy's developed market," Utilities Policy, Elsevier, vol. 79(C).

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