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Estimating the diffusion of rooftop PVs: A real estate economics perspective

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  • Vimpari, Jussi
  • Junnila, Seppo

Abstract

Currently, the economic performance of rooftop photovoltaics (PVs) is predominantly evaluated using the levelized cost of electricity approach. Some researchers have argued that rooftop PVs should be viewed as an investment, where performance is evaluated using relevant investment analysis methods. This article argues that the proper economic value and climate mitigation potential of rooftop PVs can be assessed only if the market mechanisms and characteristics of the underlying building stock are understood better. This paper utilises a customer-driven investment model to examine the feasible market potential of rooftop PVs in an urban environment. The economic returns of PV installations are calculated for 89,000 buildings separately and by comparing them to the underlying spatial property returns, the profitability and adoption years of rooftop PVs for in different locations are estimated. Implications for CO2 emissions and the impact of the net metering (NM) policy on the rate of adoption are calculated. The results imply that even in Finland rooftop solar PVs are already profitable for a third of the residential building stock and will be profitable for a fourth of the commercial building stock by 2025. Finally, the NM could increase substantially the diffusion rate of solar PVs in the coming years.

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  • Vimpari, Jussi & Junnila, Seppo, 2019. "Estimating the diffusion of rooftop PVs: A real estate economics perspective," Energy, Elsevier, vol. 172(C), pages 1087-1097.
    • Handle: RePEc:eee:energy:v:172:y:2019:i:c:p:1087-1097
    DOI: 10.1016/j.energy.2019.02.049
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    2. Jiménez-Castillo, G. & Muñoz-Rodriguez, F.J. & Rus-Casas, C. & Talavera, D.L., 2020. "A new approach based on economic profitability to sizing the photovoltaic generator in self-consumption systems without storage," Renewable Energy, Elsevier, vol. 148(C), pages 1017-1033.
    3. Samar Fatima & Verner Püvi & Matti Lehtonen, 2021. "Comparison of Different References When Assessing PV HC in Distribution Networks," Clean Technol., MDPI, vol. 3(1), pages 1-15, February.
    4. Gui, Xuechen & Gou, Zhonghua, 2021. "Understanding green building energy performance in the context of commercial estates: A multi-year and cross-region analysis using the Australian commercial building disclosure database," Energy, Elsevier, vol. 222(C).
    5. Eerika Janhunen & Niina Leskinen & Seppo Junnila, 2020. "The Economic Viability of a Progressive Smart Building System with Power Storage," Sustainability, MDPI, vol. 12(15), pages 1-18, July.
    6. Wim Van Opstal & Anse Smeets, 2022. "Market-Specific Barriers and Enablers for Organizational Investments in Solar PV—Lessons from Flanders," Sustainability, MDPI, vol. 14(20), pages 1-26, October.
    7. Silvia Bossi & Christoph Gollner & Sarah Theierling, 2020. "Towards 100 Positive Energy Districts in Europe: Preliminary Data Analysis of 61 European Cases," Energies, MDPI, vol. 13(22), pages 1-13, November.

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