Multivariate analysis of solar city economics: impact of energy prices, policy, finance, and cost on urban photovoltaic power plant implementation

Abstract

Previous research suggests that the potential for city‐scale photovoltaic (PV) applications is substantial across the globe. Successful implementation of ‘solar city’ options will depend on the strategic application of finance mechanisms, solar energy soft cost policies, and other policy tools, as well as the grid price of electricity. Capital markets recently have embraced the roll‐out of new financial instruments, including ‘green bonds,’ which could be incorporated into solar city project design to attract large investments at a low cost. A multivariate analysis method is employed to consider solar city possibilities for six cities: Amsterdam, London, Munich, New York, Seoul, and Tokyo. A Monte Carlo simulation is conducted to capture the probabilistic nature of uncertainties in the parameters and their relative importance to the financial viability of a solar city project. The analysis finds that solar city implementation strategies can be practical under a broad range of circumstances. WIREs Energy Environ 2017, 6:e241. doi: 10.1002/wene.241This article is categorized under: Photovoltaics > Systems and Infrastructure Solar Heating and Cooling > Economics and Policy Energy Policy and Planning > Economics and Policy