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Solar power generation in the US: Too expensive, or a bargain?

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  • Perez, Richard
  • Zweibel, Ken
  • Hoff, Thomas E.

Abstract

This article identifies the combined value that solar electric power plants deliver to utilities' rate payers and society's tax payers. Benefits that are relevant to utilities and their rate payers include traditional, measures of energy and capacity. Benefits that are tangible to tax payers include environmental, fuel price mitigation, outage risk protection, and long-term economic growth components. Results for the state of New York suggest that solar electric installations deliver between 15 and 40¢/kWh to ratepayers and tax payers. These results provide economic justification for the existence of payment structures (often referred to as incentives) that transfer value from those who benefit from solar electric generation to those who invest in solar electric generation.

Suggested Citation

  • Perez, Richard & Zweibel, Ken & Hoff, Thomas E., 2011. "Solar power generation in the US: Too expensive, or a bargain?," Energy Policy, Elsevier, vol. 39(11), pages 7290-7297.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:11:p:7290-7297
    DOI: 10.1016/j.enpol.2011.08.052
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    References listed on IDEAS

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    1. Letendre, Steven E. & Perez, Richard, 2006. "Understanding the Benefits of Dispersed Grid-Connected Photovoltaics: From Avoiding the Next Major Outage to Taming Wholesale Power Markets," The Electricity Journal, Elsevier, vol. 19(6), pages 64-72, July.
    2. Zweibel, Ken, 2010. "Should solar photovoltaics be deployed sooner because of long operating life at low, predictable cost?," Energy Policy, Elsevier, vol. 38(11), pages 7519-7530, November.
    3. Hoff, Thomas E & Wenger, Howard J & Farmer, Brian K, 1996. "Distributed generation : An alternative to electric utility investments in system capacity," Energy Policy, Elsevier, vol. 24(2), pages 137-147, February.
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    Cited by:

    1. Liévanos, Raoul S. & Horne, Christine, 2017. "Unequal resilience: The duration of electricity outages," Energy Policy, Elsevier, vol. 108(C), pages 201-211.
    2. John Byrne & Job Taminiau & Kyung Nam Kim & Jeongseok Seo & Joohee Lee, 2016. "A solar city strategy applied to six municipalities: integrating market, finance, and policy factors for infrastructure‐scale photovoltaic development in Amsterdam, London, Munich, New York, Seoul, an," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 5(1), pages 68-88, January.
    3. Oliva H., Sebastian & Passey, Rob & Abdullah, Md Abu, 2019. "A semi-empirical financial assessment of combining residential photovoltaics, energy efficiency and battery storage systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 206-214.
    4. Bhatti, Abdul Rauf & Salam, Zainal, 2018. "A rule-based energy management scheme for uninterrupted electric vehicles charging at constant price using photovoltaic-grid system," Renewable Energy, Elsevier, vol. 125(C), pages 384-400.
    5. Rutovitz, Jay & Oliva H., Sebastian & McIntosh, Lawrence & Langham, Ed & Teske, Sven & Atherton, Alison & Kelly, Scott, 2018. "Local network credits and local electricity trading: Results of virtual trials and the policy implications," Energy Policy, Elsevier, vol. 120(C), pages 324-334.
    6. Job Taminiau & John Byrne, 2020. "City‐scale urban sustainability: Spatiotemporal mapping of distributed solar power for New York City," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 9(5), September.
    7. Peter Cappers & Andrew Satchwell & Will Gorman & Javier Reneses, 2019. "Financial Impacts of Net-Metered Distributed PV on a Prototypical Western Utility’s Shareholders and Ratepayers," Energies, MDPI, vol. 12(24), pages 1-19, December.
    8. Adesanya, Adewale A. & Pearce, Joshua M., 2019. "Economic viability of captive off-grid solar photovoltaic and diesel hybrid energy systems for the Nigerian private sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 114(C), pages 1-1.
    9. Breyer, Christian & Koskinen, Otto & Blechinger, Philipp, 2015. "Profitable climate change mitigation: The case of greenhouse gas emission reduction benefits enabled by solar photovoltaic systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 610-628.
    10. Kumari, Pratima & Toshniwal, Durga, 2021. "Long short term memory–convolutional neural network based deep hybrid approach for solar irradiance forecasting," Applied Energy, Elsevier, vol. 295(C).
    11. Byrne, John & Taminiau, Job & Kurdgelashvili, Lado & Kim, Kyung Nam, 2015. "A review of the solar city concept and methods to assess rooftop solar electric potential, with an illustrative application to the city of Seoul," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 830-844.
    12. Oliva H., Sebastian & MacGill, Iain & Passey, Rob, 2016. "Assessing the short-term revenue impacts of residential PV systems on electricity customers, retailers and network service providers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1494-1505.
    13. Perez, Richard & Rábago, Karl R. & Trahan, Mike & Rawlings, Lyle & Norris, Ben & Hoff, Tom & Putnam, Morgan & Perez, Marc, 2016. "Achieving very high PV penetration – The need for an effective electricity remuneration framework and a central role for grid operators," Energy Policy, Elsevier, vol. 96(C), pages 27-35.

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    Keywords

    Solar energy; Value; Cost;
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