IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i4p834-d493973.html
   My bibliography  Save this article

Economics of Grid-Tied Solar Photovoltaic Systems Coupled to Heat Pumps: The Case of Northern Climates of the U.S. and Canada

Author

Listed:
  • Joshua M. Pearce

    (Department of Material Science & Engineering, Michigan Technological University, Houghton, MI 49931, USA
    Department of Electrical & Computer Engineering, Michigan Technological University, Houghton, MI 49931, USA
    School of Electrical Engineering, Aalto University, FI-00076 Espoo, Finland)

  • Nelson Sommerfeldt

    (Department of Material Science & Engineering, Michigan Technological University, Houghton, MI 49931, USA
    Department of Energy Technology, KTH Royal Institute of Technology, SE-100 44 Stockholm, Sweden)

Abstract

Solar photovoltaic (PV) technology is now a profitable method to decarbonize the grid, but if catastrophic climate change is to be avoided, emissions from transportation and heating must also decarbonize. One approach to renewable heating is leveraging improvements in PV with heat pumps (HPs). To determine the potential for PV+HP systems in northern areas of North America, this study performs numerical simulations and economic analysis using the same loads and climate, but with local electricity and natural gas rates for Sault Ste. Marie, in both Canada and U.S. Ground-mounted, fixed-tilt, grid-tied PV systems are sized to match 100% of electric loads considering cases both with and without air source HPs for residences with natural gas-based heating. For the first time the results show North American residents can profitably install residential PV+HP systems, earning up to 1.9% return in the U.S. and 2.7% in Canada, to provide for all of their electric and heating needs. Returns on PV-only systems are higher, up to 4.3%; however, the PV capacities are less than half. These results suggest northern homeowners have a clear and simple method to reduce their greenhouse gas emissions by making an investment that offers a higher internal rate of return than savings accounts, CDs and GICs in both countries. Residential PV and solar-powered heat pumps can be considered 25-year investments in financial security and environmental sustainability.

Suggested Citation

  • Joshua M. Pearce & Nelson Sommerfeldt, 2021. "Economics of Grid-Tied Solar Photovoltaic Systems Coupled to Heat Pumps: The Case of Northern Climates of the U.S. and Canada," Energies, MDPI, vol. 14(4), pages 1-17, February.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:4:p:834-:d:493973
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/4/834/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/4/834/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zhang, Long & Jiang, Yiqiang & Dong, Jiankai & Yao, Yang, 2018. "Advances in vapor compression air source heat pump system in cold regions: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 353-365.
    2. Mundada, Aishwarya S. & Shah, Kunal K. & Pearce, J.M., 2016. "Levelized cost of electricity for solar photovoltaic, battery and cogen hybrid systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 692-703.
    3. Martin L. Weitzman, 2012. "GHG Targets as Insurance Against Catastrophic Climate Damages," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(2), pages 221-244, March.
    4. Wee, Sherilyn, 2016. "The effect of residential solar photovoltaic systems on home value: A case study of Hawai‘i," Renewable Energy, Elsevier, vol. 91(C), pages 282-292.
    5. Solano, J.C. & Brito, M.C. & Caamaño-Martín, E., 2018. "Impact of fixed charges on the viability of self-consumption photovoltaics," Energy Policy, Elsevier, vol. 122(C), pages 322-331.
    6. Rad, Farzin M. & Fung, Alan S., 2016. "Solar community heating and cooling system with borehole thermal energy storage – Review of systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 1550-1561.
    7. Joshua M. Pearce & Emily Prehoda, 2019. "Could 79 People Solarize the U.S. Electric Grid?," Societies, MDPI, vol. 9(1), pages 1-27, March.
    8. Kathleen Spees & Lester Lave, 2008. "Impacts of Responsive Load in PJM: Load Shifting and Real Time Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 101-122.
    9. Razmara, M. & Bharati, G.R. & Hanover, Drew & Shahbakhti, M. & Paudyal, S. & Robinett, R.D., 2017. "Building-to-grid predictive power flow control for demand response and demand flexibility programs," Applied Energy, Elsevier, vol. 203(C), pages 128-141.
    10. Kantamneni, Abhilash & Winkler, Richelle & Gauchia, Lucia & Pearce, Joshua M., 2016. "Emerging economic viability of grid defection in a northern climate using solar hybrid systems," Energy Policy, Elsevier, vol. 95(C), pages 378-389.
    11. Chesser, Michael & Hanly, Jim & Cassells, Damien & Apergis, Nicholas, 2018. "The positive feedback cycle in the electricity market: Residential solar PV adoption, electricity demand and prices," Energy Policy, Elsevier, vol. 122(C), pages 36-44.
    12. 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.
    13. Gerbinet, Saïcha & Belboom, Sandra & Léonard, Angélique, 2014. "Life Cycle Analysis (LCA) of photovoltaic panels: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 747-753.
    14. Arnaudo, Monica & Topel, Monika & Laumert, Björn, 2020. "Techno-economic analysis of demand side flexibility to enable the integration of distributed heat pumps within a Swedish neighborhood," Energy, Elsevier, vol. 195(C).
    15. Fischer, David & Madani, Hatef, 2017. "On heat pumps in smart grids: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 342-357.
    16. Burger, Scott P. & Luke, Max, 2017. "Business models for distributed energy resources: A review and empirical analysis," Energy Policy, Elsevier, vol. 109(C), pages 230-248.
    17. Chiara Modanese & Hannu S. Laine & Toni P. Pasanen & Hele Savin & Joshua M. Pearce, 2018. "Economic Advantages of Dry-Etched Black Silicon in Passivated Emitter Rear Cell (PERC) Photovoltaic Manufacturing," Energies, MDPI, vol. 11(9), pages 1-18, September.
    18. Hong, Sungjun & Chung, Yanghon & Woo, Chungwon, 2015. "Scenario analysis for estimating the learning rate of photovoltaic power generation based on learning curve theory in South Korea," Energy, Elsevier, vol. 79(C), pages 80-89.
    19. Simshauser, Paul, 2016. "Distribution network prices and solar PV: Resolving rate instability and wealth transfers through demand tariffs," Energy Economics, Elsevier, vol. 54(C), pages 108-122.
    20. Hayibo, Koami Soulemane & Pearce, Joshua M., 2021. "A review of the value of solar methodology with a case study of the U.S. VOS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    21. Buker, Mahmut Sami & Riffat, Saffa B., 2016. "Solar assisted heat pump systems for low temperature water heating applications: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 399-413.
    22. Jäger-Waldau, Arnulf & Kougias, Ioannis & Taylor, Nigel & Thiel, Christian, 2020. "How photovoltaics can contribute to GHG emission reductions of 55% in the EU by 2030," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).
    23. Luthander, Rasmus & Widén, Joakim & Nilsson, Daniel & Palm, Jenny, 2015. "Photovoltaic self-consumption in buildings: A review," Applied Energy, Elsevier, vol. 142(C), pages 80-94.
    24. Mohanraj, M. & Belyayev, Ye. & Jayaraj, S. & Kaltayev, A., 2018. "Research and developments on solar assisted compression heat pump systems – A comprehensive review (Part A: Modeling and modifications)," Renewable and Sustainable Energy Reviews, Elsevier, vol. 83(C), pages 90-123.
    25. Yu, C.F. & van Sark, W.G.J.H.M. & Alsema, E.A., 2011. "Unraveling the photovoltaic technology learning curve by incorporation of input price changes and scale effects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(1), pages 324-337, January.
    26. Psimopoulos, Emmanouil & Bee, Elena & Widén, Joakim & Bales, Chris, 2019. "Techno-economic analysis of control algorithms for an exhaust air heat pump system for detached houses coupled to a photovoltaic system," Applied Energy, Elsevier, vol. 249(C), pages 355-367.
    27. Shirazi, Elham & Jadid, Shahram, 2017. "Cost reduction and peak shaving through domestic load shifting and DERs," Energy, Elsevier, vol. 124(C), pages 146-159.
    28. Emily Prehoda & Joshua M. Pearce & Chelsea Schelly, 2019. "Policies to Overcome Barriers for Renewable Energy Distributed Generation: A Case Study of Utility Structure and Regulatory Regimes in Michigan," Energies, MDPI, vol. 12(4), pages 1-23, February.
    29. Salpakari, Jyri & Lund, Peter, 2016. "Optimal and rule-based control strategies for energy flexibility in buildings with PV," Applied Energy, Elsevier, vol. 161(C), pages 425-436.
    30. Richard H. Moss & Jae A. Edmonds & Kathy A. Hibbard & Martin R. Manning & Steven K. Rose & Detlef P. van Vuuren & Timothy R. Carter & Seita Emori & Mikiko Kainuma & Tom Kram & Gerald A. Meehl & John F, 2010. "The next generation of scenarios for climate change research and assessment," Nature, Nature, vol. 463(7282), pages 747-756, February.
    31. Poppi, Stefano & Sommerfeldt, Nelson & Bales, Chris & Madani, Hatef & Lundqvist, Per, 2018. "Techno-economic review of solar heat pump systems for residential heating applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 22-32.
    32. Johnson, Erik & Beppler, Ross & Blackburn, Chris & Staver, Benjamin & Brown, Marilyn & Matisoff, Daniel, 2017. "Peak shifting and cross-class subsidization: The impacts of solar PV on changes in electricity costs," Energy Policy, Elsevier, vol. 106(C), pages 436-444.
    33. Luthander, Rasmus & Widén, Joakim & Munkhammar, Joakim & Lingfors, David, 2016. "Self-consumption enhancement and peak shaving of residential photovoltaics using storage and curtailment," Energy, Elsevier, vol. 112(C), pages 221-231.
    34. Mohanraj, M. & Belyayev, Ye. & Jayaraj, S. & Kaltayev, A., 2018. "Research and developments on solar assisted compression heat pump systems – A comprehensive review (Part-B: Applications)," Renewable and Sustainable Energy Reviews, Elsevier, vol. 83(C), pages 124-155.
    35. Peffley, Trevor B. & Pearce, Joshua M., 2020. "The potential for grid defection of small and medium sized enterprises using solar photovoltaic, battery and generator hybrid systems," Renewable Energy, Elsevier, vol. 148(C), pages 193-204.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sommerfeldt, Nelson & Pearce, Joshua M., 2023. "Can grid-tied solar photovoltaics lead to residential heating electrification? A techno-economic case study in the midwestern U.S," Applied Energy, Elsevier, vol. 336(C).
    2. Mariusz Niekurzak & Wojciech Lewicki & Wojciech Drożdż & Paweł Miązek, 2022. "Measures for Assessing the Effectiveness of Investments for Electricity and Heat Generation from the Hybrid Cooperation of a Photovoltaic Installation with a Heat Pump on the Example of a Household," Energies, MDPI, vol. 15(16), pages 1-20, August.
    3. Alexander V. Klokov & Alexander S. Tutunin & Elizaveta S. Sharaborova & Aleksei A. Korshunov & Egor Y. Loktionov, 2023. "Inverter Heat Pumps as a Variable Load for Off-Grid Solar-Powered Systems," Energies, MDPI, vol. 16(16), pages 1-17, August.
    4. Sadat, Seyyed Ali & Hoex, Bram & Pearce, Joshua M., 2022. "A Review of the Effects of Haze on Solar Photovoltaic Performance," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    5. Joshua M. Pearce, 2022. "Agrivoltaics in Ontario Canada: Promise and Policy," Sustainability, MDPI, vol. 14(5), pages 1-20, March.
    6. Guillermo Almonacid-Olleros & Gabino Almonacid & David Gil & Javier Medina-Quero, 2022. "Evaluation of Transfer Learning and Fine-Tuning to Nowcast Energy Generation of Photovoltaic Systems in Different Climates," Sustainability, MDPI, vol. 14(5), pages 1-15, March.
    7. Guo, Rui & Meunier, Simon & Protopapadaki, Christina & Saelens, Dirk, 2023. "A review of European low-voltage distribution networks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    8. Uzair Jamil & Abigail Bonnington & Joshua M. Pearce, 2023. "The Agrivoltaic Potential of Canada," Sustainability, MDPI, vol. 15(4), pages 1-26, February.
    9. Joshua M. Pearce & Richard Parncutt, 2023. "Quantifying Global Greenhouse Gas Emissions in Human Deaths to Guide Energy Policy," Energies, MDPI, vol. 16(16), pages 1-20, August.
    10. Uzair Jamil & Joshua M. Pearce, 2022. "Energy Policy for Agrivoltaics in Alberta Canada," Energies, MDPI, vol. 16(1), pages 1-31, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chelsea Schelly & Don Lee & Elise Matz & Joshua M. Pearce, 2021. "Applying a Relationally and Socially Embedded Decision Framework to Solar Photovoltaic Adoption: A Conceptual Exploration," Sustainability, MDPI, vol. 13(2), pages 1-18, January.
    2. Peffley, Trevor B. & Pearce, Joshua M., 2020. "The potential for grid defection of small and medium sized enterprises using solar photovoltaic, battery and generator hybrid systems," Renewable Energy, Elsevier, vol. 148(C), pages 193-204.
    3. Sommerfeldt, Nelson & Pearce, Joshua M., 2023. "Can grid-tied solar photovoltaics lead to residential heating electrification? A techno-economic case study in the midwestern U.S," Applied Energy, Elsevier, vol. 336(C).
    4. Hayibo, Koami Soulemane & Pearce, Joshua M., 2021. "A review of the value of solar methodology with a case study of the U.S. VOS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    5. Tervo, Eric & Agbim, Kenechi & DeAngelis, Freddy & Hernandez, Jeffrey & Kim, Hye Kyung & Odukomaiya, Adewale, 2018. "An economic analysis of residential photovoltaic systems with lithium ion battery storage in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 1057-1066.
    6. Schlosser, F. & Jesper, M. & Vogelsang, J. & Walmsley, T.G. & Arpagaus, C. & Hesselbach, J., 2020. "Large-scale heat pumps: Applications, performance, economic feasibility and industrial integration," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    7. Han, Xuejiao & Garrison, Jared & Hug, Gabriela, 2022. "Techno-economic analysis of PV-battery systems in Switzerland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    8. Joshua M. Pearce & Emily Prehoda, 2019. "Could 79 People Solarize the U.S. Electric Grid?," Societies, MDPI, vol. 9(1), pages 1-27, March.
    9. O'Shaughnessy, Eric & Cutler, Dylan & Ardani, Kristen & Margolis, Robert, 2018. "Solar plus: A review of the end-user economics of solar PV integration with storage and load control in residential buildings," Applied Energy, Elsevier, vol. 228(C), pages 2165-2175.
    10. von Appen, J. & Braun, M., 2018. "Strategic decision making of distribution network operators and investors in residential photovoltaic battery storage systems," Applied Energy, Elsevier, vol. 230(C), pages 540-550.
    11. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe & Ozturk, Ilhan, 2022. "Economics and policy implications of residential photovoltaic systems in Italy's developed market," Utilities Policy, Elsevier, vol. 79(C).
    12. Vladimir Z. Gjorgievski & Nikolas G. Chatzigeorgiou & Venizelos Venizelou & Georgios C. Christoforidis & George E. Georghiou & Grigoris K. Papagiannis, 2020. "Evaluation of Load Matching Indicators in Residential PV Systems-the Case of Cyprus," Energies, MDPI, vol. 13(8), pages 1-18, April.
    13. Maria Pinamonti & Alessandro Prada & Paolo Baggio, 2020. "Rule-Based Control Strategy to Increase Photovoltaic Self-Consumption of a Modulating Heat Pump Using Water Storages and Building Mass Activation," Energies, MDPI, vol. 13(23), pages 1-21, November.
    14. Nahavandinezhad, Mohammad & Zahedi, Alireza, 2022. "Conceptual design of solar/geothermal hybrid system focusing on technical, economic and environmental parameters," Renewable Energy, Elsevier, vol. 181(C), pages 1110-1125.
    15. Günther, Claudia & Schill, Wolf-Peter & Zerrahn, Alexander, 2021. "Prosumage of solar electricity: Tariff design, capacity investments, and power sector effects," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 152.
    16. Menegon, Diego & Persson, Tomas & Haberl, Robert & Bales, Chris & Haller, Michel, 2020. "Direct characterisation of the annual performance of solar thermal and heat pump systems using a six-day whole system test," Renewable Energy, Elsevier, vol. 146(C), pages 1337-1353.
    17. Noor Muhammad Abd Rahman & Lim Chin Haw & Ahmad Fazlizan, 2021. "A Literature Review of Naturally Ventilated Public Hospital Wards in Tropical Climate Countries for Thermal Comfort and Energy Saving Improvements," Energies, MDPI, vol. 14(2), pages 1-22, January.
    18. Zhang, Yijie & Ma, Tao & Yang, Hongxing, 2022. "Grid-connected photovoltaic battery systems: A comprehensive review and perspectives," Applied Energy, Elsevier, vol. 328(C).
    19. 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.
    20. Finck, Christian & Li, Rongling & Zeiler, Wim, 2019. "Economic model predictive control for demand flexibility of a residential building," Energy, Elsevier, vol. 176(C), pages 365-379.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:14:y:2021:i:4:p:834-:d:493973. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.