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Economic and policy analysis for solar PV systems in Indiana

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  • Jung, Jinho
  • Tyner, Wallace E.

Abstract

In recent years, the energy market in the US and globally is expanding the production of renewable energy. Solar energy for electricity is also expanding in the US. Indiana is one of the states expanding solar energy with solar photovoltaic (PV) systems. Therefore, we conduct benefit cost analysis with several uncertain input variables to determine the economics of adopting solar PV systems in Indiana based on policy instruments that could increase adoption of solar PV systems. The specific objectives are analyses of the cost distribution of solar PV systems compared with grid electricity in homes and estimating the probability that solar can be cheaper than electricity from grids under different policy combinations. We first do the analysis under current policy and then the analysis under potential policy options for a variety of scenarios. Also, the results inform government policy makers on how effective the alternative policies for encouraging solar PV systems are. The results show that current policies are important in reducing the cost of solar PV systems. However, with current policies, there is only 50–50 chance of solar being cheaper than electricity from grids. If potential policies are implemented, solar PV systems can be more economical than grid electricity.

Suggested Citation

  • Jung, Jinho & Tyner, Wallace E., 2014. "Economic and policy analysis for solar PV systems in Indiana," Energy Policy, Elsevier, vol. 74(C), pages 123-133.
    • Handle: RePEc:eee:enepol:v:74:y:2014:i:c:p:123-133
    DOI: 10.1016/j.enpol.2014.08.027
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    References listed on IDEAS

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    1. Liu, Xiaohui & O'Rear, Eric G. & Tyner, Wallace E. & Pekny, Joseph F., 2014. "Purchasing vs. leasing: A benefit-cost analysis of residential solar PV panel use in California," Renewable Energy, Elsevier, vol. 66(C), pages 770-774.
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    3. Cai, Desmond W.H. & Adlakha, Sachin & Low, Steven H. & De Martini, Paul & Mani Chandy, K., 2013. "Impact of residential PV adoption on Retail Electricity Rates," Energy Policy, Elsevier, vol. 62(C), pages 830-843.
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    4. Sesmero, Juan P. & Jung, Jinho & Tyner, Wallace E., 2015. "Cost-effectiveness of policies supporting solar panels in Indiana," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205792, Agricultural and Applied Economics Association.
    5. Dirk Johan van Vuuren & Annlizé L. Marnewick & Jan Harm C. Pretorius, 2021. "A Financial Evaluation of a Multiple Inclination, Rooftop-Mounted, Photovoltaic System Where Structured Tariffs Apply: A Case Study of a South African Shopping Centre," Energies, MDPI, vol. 14(6), pages 1-26, March.
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    9. Williams, Eric & Carvalho, Rexon & Hittinger, Eric & Ronnenberg, Matthew, 2020. "Empirical development of parsimonious model for international diffusion of residential solar," Renewable Energy, Elsevier, vol. 150(C), pages 570-577.
    10. Lee, Minhyun & Hong, Taehoon & Koo, Choongwan, 2016. "An economic impact analysis of state solar incentives for improving financial performance of residential solar photovoltaic systems in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 590-607.
    11. Mahelet G. Fikru & Gregory Gelles & Ana-Maria Ichim & Joseph D. Smith, 2019. "Notes on the Economics of Residential Hybrid Energy System," Energies, MDPI, vol. 12(14), pages 1-18, July.
    12. Yu-Ling Hsiao, Cody & Ai, Dan & Wei, Xinyang & Sheng, Ni, 2021. "The contagious effect of China’s energy policy on stock markets: The case of the solar photovoltaic industry," Renewable Energy, Elsevier, vol. 164(C), pages 74-86.
    13. Cheng, Cheng & Dong, Kangyin & Wang, Zhen & Liu, Shulin & Jurasz, Jakub & Zhang, Haoran, 2023. "Rethinking the evaluation of solar photovoltaic projects under YieldCo mode: A real option perspective," Applied Energy, Elsevier, vol. 336(C).
    14. Dirk Johan van Vuuren & Annlizé L. Marnewick & Jan Harm C. Pretorius, 2021. "Validation of a Simulation-Based Pre-Assessment Process for Solar Photovoltaic Technology Implemented on Rooftops of South African Shopping Centres," Sustainability, MDPI, vol. 13(5), pages 1-26, February.
    15. Kim, Byungil & Kim, Changyoon, 2018. "Estimating the effect of module failures on the gross generation of a photovoltaic system using agent-based modeling," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 1019-1024.
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    18. 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.

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