Grid parity analysis of distributed PV generation considering tariff policies in Argentina

Abstract

This work analyzes the grid parity of distributed photovoltaic generation (DG-PV) in the province of San Juan-Argentina, proving that currently, the levelized cost of DG-PV is on average 20% higher than the tariff price for residential customers. In order to achieve the grid parity, the provincial government should implement incentive mechanisms such as the Net Billing proposed in the National Law 27.424 (2017). The impact of the Net Billing scheme proposed in such law, from the point of view of a typical residential user, and also compared with the impact of the Net Metering and Feed-in Tariff mechanisms are presented in this work. Results show that the Net Metering scheme could be the most profitable or economically beneficial for PV-owners, but it could have some negative impact on the incomes of utilities. Besides, investment decisions in renewable distributed generation are significantly affected by technological costs, national financial conditions, and tariffs. This analysis also suggests that taxes included in the tariff structure are an important aspect to take into account for implementing incentive mechanisms. Finally, some energy policies are recommended to guarantee the profitability of DG-PV systems and to assist the government in making decisions to promote these systems.