Sharing economy and optimal investment decisions for distributed solar generation

Abstract

This paper presents three different models to address the distributed solar photovoltaic (PV) investment problem: the status-quo of net-metering, a sharing economy model, and a cooperative PV decision problem faced by an aggregator participating in wholesale electric markets. In the status-quo case, firms can sell back their excess generation to the utility at a retail tariff. This case is subject to the constraint that firms cannot be net producers of electric on an annual basis. In our sharing economy model, firms can pool their excess generation and trade it in a spot market among themselves. However, the collective does not get paid for selling electric back to the utility. In the cooperative case, an aggregator decides where to optimally invest PV among the participants. Our main goal in studying these three cases is that net-metering (also referred as feed-in) programs are under threat and being phased out, which places future distributed PV investment at risk. In this event, we show that new business models, such as the sharing economy model or a cooperative participation, offer a plausible pathway to maintain and even accelerate PV investment. Several case studies with numerical results are presented to discuss the characteristics of the three proposed models.