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Technical and economic analysis of Domestic High Consumption Tariff niche market for photovoltaic systems in the Mexican household sector

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  • Grande, Genice
  • Islas, Jorge
  • Rios, Mario

Abstract

This study shows that grid-connected photovoltaic systems (SFVI) are profitable for electricity users falling within the so called Domestic High Consumption Tariff (DAC). These users do not receive any subsidy and make a SFVI feasibly due to the following double mechanism: on the one hand, the reduced amount of electricity that is drawn from the grid, and on the other, a re-classification which makes them pass from the DAC to a lower consumption tariff which benefits from State subsidies. It is also shown that the utilisation of SFVI would lead to economic benefits for the electric power sector which in consequence accounts for a social benefit. It is estimated that Tariff 1 DAC users account for a potential SFVI capacity of slightly above 400MW. This capacity may deploy a first significant SFVI market in Mexico which so far barely exists and would also represent a reduction in electricity drawn from the grid of nearly 614GWh per year and reduced CO2eq emissions of 841 thousand tonnes per year. Finally, some recommendations are inferred in order to improve the social benefit of this first deployment of SFVI in the Mexican Household sector. The analysis presented for Mexico can be replicated for other countries with subsidised residential tariffs and similar structures such as those countries identified in this paper.

Suggested Citation

  • Grande, Genice & Islas, Jorge & Rios, Mario, 2015. "Technical and economic analysis of Domestic High Consumption Tariff niche market for photovoltaic systems in the Mexican household sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 738-748.
    • Handle: RePEc:eee:rensus:v:48:y:2015:i:c:p:738-748
    DOI: 10.1016/j.rser.2015.04.038
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    1. Orioli, Aldo & Di Gangi, Alessandra, 2017. "Six-years-long effects of the Italian policies for photovoltaics on the pay-back period of grid-connected PV systems installed in urban contexts," Energy, Elsevier, vol. 122(C), pages 458-470.
    2. Akinyele, D.O. & Rayudu, R.K., 2016. "Community-based hybrid electricity supply system: A practical and comparative approach," Applied Energy, Elsevier, vol. 171(C), pages 608-628.
    3. Hancevic, Pedro I. & Nuñez, Hector M. & Rosellon, Juan, 2017. "Distributed photovoltaic power generation: Possibilities, benefits, and challenges for a widespread application in the Mexican residential sector," Energy Policy, Elsevier, vol. 110(C), pages 478-489.
    4. Genice K. Grande-Acosta & Jorge M. Islas-Samperio, 2020. "Boosting Energy Efficiency and Solar Energy inside the Residential, Commercial, and Public Services Sectors in Mexico," Energies, MDPI, vol. 13(21), pages 1-24, October.
    5. Alberto-Jesus Perea-Moreno & Quetzalcoatl Hernandez-Escobedo & Javier Garrido & Joel Donaldo Verdugo-Diaz, 2018. "Stand-Alone Photovoltaic System Assessment in Warmer Urban Areas in Mexico," Energies, MDPI, vol. 11(2), pages 1-13, January.
    6. Pérez-Denicia, Eduardo & Fernández-Luqueño, Fabián & Vilariño-Ayala, Darnes & Manuel Montaño-Zetina, Luis & Alfonso Maldonado-López, Luis, 2017. "Renewable energy sources for electricity generation in Mexico: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 597-613.
    7. Marco Mele, 2019. "Renewable Energy Consumption: the Effects on Economic Growth in Mexico," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 269-273.
    8. Gabriel, Cle-Anne, 2016. "What is challenging renewable energy entrepreneurs in developing countries?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 362-371.

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