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Measuring scale efficiency and returns to scale on large commercial rooftop photovoltaic systems in California

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  • Sueyoshi, Toshiyuki
  • Wang, Derek

Abstract

Electricity generated by solar Photovoltaic (PV) power systems is emerging as one of the most promising cleaner alternatives to replace conventional energy sources, such as coal, oil, and natural gas. This study examines managerial sources of operational efficiency or inefficiency on 855 large commercial rooftop PV power systems in California by examining both scale efficiency and Returns to Scale (RTS). For the research purpose, this study utilizes Data Envelopment Analysis (DEA) as a methodology to assess the scale measures. A difficulty in applying DEA to the performance analysis of PV power systems is that it contains uncontrollable variables such as ambient temperature and solar irradiation, all of which are influenced by weather. It is also widely known that PV power systems cannot produce electricity during night, so being unable to serve as a base load. Thus, these uncontrollable factors often influence the performance of PV power systems. Paying attention to the effects of those uncontrollable factors, this study discusses how to measure scale efficiency and RTS within the framework of DEA. Then, as an application of the proposed approach, this study examines the performance of large commercial rooftop PV power systems in California. This study finds that they belong to increasing (48), constant (807) and decreasing (0) RTS, implying that most of the PV power systems in California have been operating in their appropriate sizes. This further indicates that the operational inefficiency of PV power systems is due to managerial inappropriateness, not their sizes for generation. Thus, there is a space to improve operational efficiency of rooftop PV systems under constant RTS, through managerial efforts such as increase in transmission capacity and operational flexibility to improve solar penetration, and routine maintenance to minimize detrimental effects of dust deposition.

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  • Sueyoshi, Toshiyuki & Wang, Derek, 2017. "Measuring scale efficiency and returns to scale on large commercial rooftop photovoltaic systems in California," Energy Economics, Elsevier, vol. 65(C), pages 389-398.
    • Handle: RePEc:eee:eneeco:v:65:y:2017:i:c:p:389-398
    DOI: 10.1016/j.eneco.2017.04.019
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    More about this item

    Keywords

    Solar photovoltaic power systems; Returns to scale; Scale efficiency;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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