The Profitability of Residential Photovoltaic Systems. A New Scheme of Subsidies Based on the Price of CO2 in a Developed PV Market

Idiano D’Adamo

doi:10.3390/socsci7090148

Abstract

Photovoltaic (PV) resource drives the clean global economy of the future. Its sustainability is widely confirmed in literature, however some countries present a growth very low in the last years. A new policy proposal is examined in this work. It aims to stimulate a new diffusion of PV plants in mature markets (e.g., Italy) regarding residential consumers. The subsidy is given to the amount of energy produced by PV plant for a period of 20 years (equal to its lifetime) and its value is calculated according to the scheme of European Emissions Trading System (EU ETS). Discounted Cash Flow (DCF) is used as economic method and two indexes are proposed: Net Present Value (NPV) and Discounted Payback Time (DPBT). The baseline case studies vary in function of two variables; (i) the share of self-consumption (30%, 40% and 50%) and (ii) the price of emissions avoided (10, 35 and 70 € per ton of CO2eq). Results confirms the environmental advantages of PV sources as alternative to the use of fossil fuels (685 gCO2eq/kWh) and economic opportunities are verified in several scenarios (from 48 €/kW to 1357 €/kW). In particular, the profitability of PV systems is greater with a subsidized rate of fiscal deduction of 50% in comparison to subsidies with a value of carbon dioxide lower than 18.50 €/tCO2eq.

Highlights

Social Sciences aims to integrate considerations regarding the sustainability of humanity (Lin 2012)
The first step is represented by the calculation of reduction in the Emissions of Carbon Dioxide (RECD)
According to Equation (4) and input data reported in Table 1, EOut,1 is equal to 4680 kWh/year during the first year

Summary

Introduction

Social Sciences aims to integrate considerations regarding the sustainability of humanity (Lin 2012). The global warming is one the most important hazards for the Earth’s future and the use of renewable energy sources (RES) is a valid solution to stop their adverse influences on human life (Saavedra et al 2018). The whole energy sector changes towards the use of low-carbon applications. Renewable energy (RE) power generating capacity is equal to 2195 GW in. This electricity transition is driven by increases in installed capacity of solar PV (+99 GW with an increase of 32.7% than 2016) and wind power (+52 GW with an increase of 10.7% than 2016)—Figure 1 (REN21 2018)

Objectives

Results

Conclusion