Financial incentive mechanisms for residential PV systems: An analysis based on the real performance data

Abstract

One of the major hurdles in popularizing the residential solar projects is its high cost, which has to be borne by individual house owners. Several policy frameworks and incentive mechanisms like Feed in Tariff (FiT) and Net Metering (NM) are being implemented globally to make these projects attractive to the consumers. In this study, we identify the viable FiT and NM for making residential solar PV projects economically attractive in Brunei Darussalam. The analysis is based on the actual performance data collected from a 6kWp Multi-crystalline residential solar PV system. By considering the break-even point of Net Present Value (NPV) of the project, the minimum FiT for the residential PV projects is estimated as $ 0.22 /kWh. Due to the very low electricity tariff in Brunei, the NM rate is highly sensitive to the installed PV size and electricity consumption pattern. Under this condition, the viable NM rate is identified as $ 0.74/kWh. Sensitivities of Fit and NM rates on other economic metrics are also presented in the paper.