Optimal investment policy in sharing and standalone economy for solar PV panel under operational cost

Abstract

The transition to sustainable energy sources, driven by the need to address climate change and resource depletion, has led to the increasing adoption of renewable energy technologies. Among these sustainable alternatives, solar energy stands out prominently. Harnessing the power of the sun aligns with various Sustainable Development Goals (SDGs) by providing clean and affordable energy, promoting climate action, and supporting sustainable communities. Solar PV panels face challenges despite their advantages, including susceptibility to natural disruptions like hurricanes, hailstorms and extreme temperatures. In 2019, the solar energy sector experienced a stark contrast in losses, with average solar losses resulting from conventional natural disasters or severe weather conditions being nearly 24 times higher than the average losses unrelated to weather events. Furthermore, a significant 70% of solar losses within the past decade have emerged since 2017. Similarly, in 2019 hail storm damaged more than 400,000 solar panels and caused insurance losses totaling $70 million in Texas. The research addresses the effect of natural disruptions on investment decisions. It explores the viability of a sharing economy business model that allows multiple participants to collectively invest in solar PV systems and share the benefits to ensure the future expansion of solar PV installations. The study formulates the problem as a game theory model to strategize and find optimal solutions for both the standalone economy and sharing economy scenarios, considering operational costs, net metering and the unpredictability of natural disasters. By providing valuable insights into the dynamics of the PV market with the help of computational results, the research aims to enhance the resilience of solar installations and promote sustainable energy practices. Through this work, individuals and communities can make informed investment decisions, contributing to a cleaner, greener and more sustainable world.