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Title: Impact of Different Economic Performance Metrics on the Perceived Value of Solar Photovoltaics

Abstract

Photovoltaic (PV) systems are installed by several types of market participants, ranging from residential customers to large-scale project developers and utilities. Each type of market participant frequently uses a different economic performance metric to characterize PV value because they are looking for different types of returns from a PV investment. This report finds that different economic performance metrics frequently show different price thresholds for when a PV investment becomes profitable or attractive. Several project parameters, such as financing terms, can have a significant impact on some metrics [e.g., internal rate of return (IRR), net present value (NPV), and benefit-to-cost (B/C) ratio] while having a minimal impact on other metrics (e.g., simple payback time). As such, the choice of economic performance metric by different customer types can significantly shape each customer's perception of PV investment value and ultimately their adoption decision.

Authors:
; ;
Publication Date:
Research Org.:
National Renewable Energy Lab. (NREL), Golden, CO (United States)
Sponsoring Org.:
USDOE Office of Solar Energy Technologies Program
OSTI Identifier:
1028528
Report Number(s):
NREL/TP-6A20-52197
TRN: US201124%%381
DOE Contract Number:  
AC36-08GO28308
Resource Type:
Technical Report
Country of Publication:
United States
Language:
English
Subject:
14 SOLAR ENERGY; ECONOMICS; FINANCING; MARKET; METRICS; PERFORMANCE; PRICES; SHAPE; PHOTOVOLTAIC; PV; INTERNAL RATE OF RETURN; NET PRESENT VALUE; ECONOMIC PERFORMANCE; PAYBACK; ENERGY; INCENTIVES; MONTHLY BILL SAVINGS; LEVELIZED COST OF ENERGY; LCOE; Energy Analysis

Citation Formats

Drury, E., Denholm, P., and Margolis, R. Impact of Different Economic Performance Metrics on the Perceived Value of Solar Photovoltaics. United States: N. p., 2011. Web. doi:10.2172/1028528.
Drury, E., Denholm, P., & Margolis, R. Impact of Different Economic Performance Metrics on the Perceived Value of Solar Photovoltaics. United States. doi:10.2172/1028528.
Drury, E., Denholm, P., and Margolis, R. Sat . "Impact of Different Economic Performance Metrics on the Perceived Value of Solar Photovoltaics". United States. doi:10.2172/1028528. https://www.osti.gov/servlets/purl/1028528.
@article{osti_1028528,
title = {Impact of Different Economic Performance Metrics on the Perceived Value of Solar Photovoltaics},
author = {Drury, E. and Denholm, P. and Margolis, R.},
abstractNote = {Photovoltaic (PV) systems are installed by several types of market participants, ranging from residential customers to large-scale project developers and utilities. Each type of market participant frequently uses a different economic performance metric to characterize PV value because they are looking for different types of returns from a PV investment. This report finds that different economic performance metrics frequently show different price thresholds for when a PV investment becomes profitable or attractive. Several project parameters, such as financing terms, can have a significant impact on some metrics [e.g., internal rate of return (IRR), net present value (NPV), and benefit-to-cost (B/C) ratio] while having a minimal impact on other metrics (e.g., simple payback time). As such, the choice of economic performance metric by different customer types can significantly shape each customer's perception of PV investment value and ultimately their adoption decision.},
doi = {10.2172/1028528},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Sat Oct 01 00:00:00 EDT 2011},
month = {Sat Oct 01 00:00:00 EDT 2011}
}

Technical Report:

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