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The value of module efficiency in lowering the levelized cost of energy of photovoltaic systems

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  • Wang, Xiaoting
  • Kurdgelashvili, Lado
  • Byrne, John
  • Barnett, Allen

Abstract

One standard that is used to compare different energy generation technologies or systems is the levelized cost of energy (LCOE). The relatively high LCOE of photovoltaics (PV) is an obstacle to adopting it as a major electricity source for terrestrial applications. In a conventional PV system, the cost of the module contributes approximately half of the expense and the other costs are together summarized as balance of system (BOS). A large portion of the BOS is not related to the peak power of the system, but can be either proportional to or independent of the total installation area. Across different PV systems with the same installation area, this part of BOS ($/W) is directly dependent on the module efficiency. Therefore, the LCOE is affected by the module efficiency even if the module price ($/W) remains the same. In this paper, we compare the LCOE across PV systems with equal installation areas but with modules of different efficiencies installed with fixed tilt, 1-axis tracking or 2-axis tracking. We conclude that: (1) at a given module price in $/W, more efficient PV modules lead to lower LCOE systems; (2) when meeting an LCOE goal, the PV module efficiency has a lower limit that cannot be offset by module price; and (3) both 1-axis and 2-axis tracking installations provide lower LCOEs than fixed tilt installations.

Suggested Citation

  • Wang, Xiaoting & Kurdgelashvili, Lado & Byrne, John & Barnett, Allen, 2011. "The value of module efficiency in lowering the levelized cost of energy of photovoltaic systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4248-4254.
    • Handle: RePEc:eee:rensus:v:15:y:2011:i:9:p:4248-4254
    DOI: 10.1016/j.rser.2011.07.125
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    2. Nemet, Gregory F. & O’Shaughnessy, Eric & Wiser, Ryan & Darghouth, Naïm & Barbose, Galen & Gillingham, Ken & Rai, Varun, 2017. "Characteristics of low-priced solar PV systems in the U.S," Applied Energy, Elsevier, vol. 187(C), pages 501-513.
    3. Chul-Yong Lee & Jaekyun Ahn, 2020. "Stochastic Modeling of the Levelized Cost of Electricity for Solar PV," Energies, MDPI, vol. 13(11), pages 1-18, June.
    4. Kurdgelashvili, Lado & Li, Junli & Shih, Cheng-Hao & Attia, Benjamin, 2016. "Estimating technical potential for rooftop photovoltaics in California, Arizona and New Jersey," Renewable Energy, Elsevier, vol. 95(C), pages 286-302.
    5. Orioli, Aldo & Di Gangi, Alessandra, 2017. "Six-years-long effects of the Italian policies for photovoltaics on the grid parity of grid-connected photovoltaic systems installed in urban contexts," Energy, Elsevier, vol. 130(C), pages 55-75.
    6. Zou, Hongyang & Du, Huibin & Brown, Marilyn A. & Mao, Guozhu, 2017. "Large-scale PV power generation in China: A grid parity and techno-economic analysis," Energy, Elsevier, vol. 134(C), pages 256-268.
    7. Orioli, Aldo & Di Gangi, Alessandra, 2015. "The recent change in the Italian policies for photovoltaics: Effects on the payback period and levelized cost of electricity of grid-connected photovoltaic systems installed in urban contexts," Energy, Elsevier, vol. 93(P2), pages 1989-2005.
    8. Wiebe, Kirsten S. & Lutz, Christian, 2016. "Endogenous technological change and the policy mix in renewable power generation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 739-751.
    9. Hernández-Moro, J. & Martínez-Duart, J.M., 2013. "Analytical model for solar PV and CSP electricity costs: Present LCOE values and their future evolution," Renewable and Sustainable Energy Reviews, Elsevier, vol. 20(C), pages 119-132.
    10. Bobinaite, Viktorija & Tarvydas, Dalius, 2014. "Financing instruments and channels for the increasing production and consumption of renewable energy: Lithuanian case," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 259-276.
    11. Ouedraogo, Bachir I. & Kouame, S. & Azoumah, Y. & Yamegueu, D., 2015. "Incentives for rural off grid electrification in Burkina Faso using LCOE," Renewable Energy, Elsevier, vol. 78(C), pages 573-582.
    12. Shen, Wei & Chen, Xi & Qiu, Jing & Hayward, Jennifier A & Sayeef, Saad & Osman, Peter & Meng, Ke & Dong, Zhao Yang, 2020. "A comprehensive review of variable renewable energy levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    13. Aqachmar, Zineb & Campana, Pietro Elia & Bouhal, Tarik & El Qarnia, Hamid & Outzourhit, Abdelkader & Alami Ibnouelghazi, El & Mouak, Said & Aqachmar, Atman, 2022. "Electrification of Africa through CPV installations in small-scale industrial applications: Energetic, economic, and environmental analysis," Renewable Energy, Elsevier, vol. 197(C), pages 723-746.
    14. Joseph Nyangon & John Byrne & Job Taminiau, 2017. "An assessment of price convergence between natural gas and solar photovoltaic in the U.S. electricity market," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 6(3), May.
    15. Bazilian, Morgan & Onyeji, Ijeoma & Liebreich, Michael & MacGill, Ian & Chase, Jennifer & Shah, Jigar & Gielen, Dolf & Arent, Doug & Landfear, Doug & Zhengrong, Shi, 2013. "Re-considering the economics of photovoltaic power," Renewable Energy, Elsevier, vol. 53(C), pages 329-338.
    16. Hong, Taehoon & Koo, Choongwan & Kwak, Taehyun, 2013. "Framework for the implementation of a new renewable energy system in an educational facility," Applied Energy, Elsevier, vol. 103(C), pages 539-551.
    17. Cherrington, R. & Goodship, V. & Longfield, A. & Kirwan, K., 2013. "The feed-in tariff in the UK: A case study focus on domestic photovoltaic systems," Renewable Energy, Elsevier, vol. 50(C), pages 421-426.
    18. Lai, Chun Sing & McCulloch, Malcolm D., 2017. "Levelized cost of electricity for solar photovoltaic and electrical energy storage," Applied Energy, Elsevier, vol. 190(C), pages 191-203.
    19. Hong, Taehoon & Koo, Choongwan & Kwak, Taehyun & Park, Hyo Seon, 2014. "An economic and environmental assessment for selecting the optimum new renewable energy system for educational facility," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 286-300.
    20. Kirsten Svenja Wiebe & Ulrike Lehr & Christian Lutz, 2013. "Green change – endogenizing technical progress in the renewable power generation sector," EcoMod2013 5117, EcoMod.
    21. Hernández-Moro, J. & Martínez-Duart, J.M., 2015. "Economic analysis of the contribution of photovoltaics to the decarbonization of the power sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1288-1297.
    22. Madhlopa, Amos & Sparks, Debbie & Keen, Samantha & Moorlach, Mascha & Krog, Pieter & Dlamini, Thuli, 2015. "Optimization of a PV–wind hybrid system under limited water resources," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 324-331.
    23. Hutchby, James A., 2014. "A “Moore's Law”-like approach to roadmapping photovoltaic technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 883-890.
    24. Yong Zhu & Rongrong Zhai & Yongping Yang & Miguel Angel Reyes-Belmonte, 2017. "Techno-Economic Analysis of Solar Tower Aided Coal-Fired Power Generation System," Energies, MDPI, vol. 10(9), pages 1-26, September.

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