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Residential solar power profitability with thermal energy storage and carbon-corrected electricity prices

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  • Huuki, Hannu
  • Karhinen, Santtu
  • Böök, Herman
  • Ding, Chao
  • Ruokamo, Enni

Abstract

We study the economic profitability of residential solar photovoltaic (PV) systems in Finland. We show a moderate rate of returns (1.0% in Northern and 1.4% in Southern Finland) for the PV system investments with time-of-use hot water heating. Optimized hot water heating increases the rate of return by 0.6 percentage points. We internalize the negative externalities of greenhouse gas emissions from electricity generation by presenting the hourly electricity prices as a function of emission permit costs. A 10 €/tCO2 increase in carbon price improves the PV investment rate of return by 0.3 percentage points.

Suggested Citation

  • Huuki, Hannu & Karhinen, Santtu & Böök, Herman & Ding, Chao & Ruokamo, Enni, 2021. "Residential solar power profitability with thermal energy storage and carbon-corrected electricity prices," Utilities Policy, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:juipol:v:68:y:2021:i:c:s0957178720301478
    DOI: 10.1016/j.jup.2020.101157
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