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The Potential Market for Photovoltaics and Other Distributed Resources in Rural Electric Cooperatives

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  • Thomas E. Hoff
  • Matthew Cheney

Abstract

In the United States, rural electric cooperatives have an aging distribution system (1 million miles of distribution wires were originally installed over 40 years ago) and a load density that is about one-tenth of the load density at other utilities. The result is that there may soon be a large market opportunity for photovoltaics (PV) and other distributed resources. This paper calculates the cost of replacing portions of the distribution system as it wears out with hybrid-PV systems, compares it to the cost of replacing the system with equivalent distribution system equipment, and selects the alternative with the lowest cost. Results suggest that there is a potential market of500 MW to 950MWofPVat a price of $3, OOO/kW (a 50 percent reduction over PV prices in 2000) and a corresponding fossil-based generation market size of 280 MW to 555 MW at a price of $1, OOO/kW. The hybrid-PV systems could replace 7 percent to 16 percent of the miles of distribution system and could save co-ops $1.0 billion to $2.5 billion (present value).

Suggested Citation

  • Thomas E. Hoff & Matthew Cheney, 2000. "The Potential Market for Photovoltaics and Other Distributed Resources in Rural Electric Cooperatives," The Energy Journal, , vol. 21(3), pages 113-127, July.
    • Handle: RePEc:sae:enejou:v:21:y:2000:i:3:p:113-127
    DOI: 10.5547/ISSN0195-6574-EJ-Vol21-No3-5
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    References listed on IDEAS

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    1. Thomas E. Hoff, 1997. "Using Distributed Resources to Manage Risks Caused by Demand Uncertainty," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 63-84.
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