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Title: Designing PV Incentive Programs to Promote Performance: A Reviewof Current Practice

Abstract

Increasing levels of financial support for customer-sited photovoltaic (PV) systems, provided through publicly-funded incentive programs, has heightened concerns about the long-term performance of these systems. Given the barriers that customers face to ensuring that their PV systems perform well, and the responsibility that PV incentive programs bear to ensure that public funds are prudently spent, these programs should, and often do, play a critical role in ensuring that PV systems receiving incentives perform well. To provide a point of reference for assessing the current state of the art, and to inform program design efforts going forward, we examine the approaches to encouraging PV system performance used by 32 prominent PV incentive programs in the U.S. We identify eight general strategies or groups of related strategies that these programs have used to address performance issues, and highlight important differences in the implementation of these strategies among programs.

Authors:
; ;
Publication Date:
Research Org.:
Ernest Orlando Lawrence Berkeley NationalLaboratory, Berkeley, CA (US)
Sponsoring Org.:
USDOE
OSTI Identifier:
918662
Report Number(s):
LBNL-61643-Conf.
Journal ID: ISSN 1364-0321; R&D Project: E11201; BnR: 600303000; TRN: US200819%%386
DOE Contract Number:
DE-AC02-05CH11231
Resource Type:
Conference
Resource Relation:
Journal Volume: 12; Journal Issue: 4; Conference: SOLAR 2007, Cleveland, OH, July 7-12,2007
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY, AND ECONOMY; DESIGN; IMPLEMENTATION; PERFORMANCE; PHOTOVOLTAIC POWER SUPPLIES; FINANCIAL INCENTIVES

Citation Formats

Barbose, Galen, Wiser, Ryan, and Bolinger, Mark. Designing PV Incentive Programs to Promote Performance: A Reviewof Current Practice. United States: N. p., 2007. Web. doi:10.1016/j.rser.2007.01.002.
Barbose, Galen, Wiser, Ryan, & Bolinger, Mark. Designing PV Incentive Programs to Promote Performance: A Reviewof Current Practice. United States. doi:10.1016/j.rser.2007.01.002.
Barbose, Galen, Wiser, Ryan, and Bolinger, Mark. Fri . "Designing PV Incentive Programs to Promote Performance: A Reviewof Current Practice". United States. doi:10.1016/j.rser.2007.01.002. https://www.osti.gov/servlets/purl/918662.
@article{osti_918662,
title = {Designing PV Incentive Programs to Promote Performance: A Reviewof Current Practice},
author = {Barbose, Galen and Wiser, Ryan and Bolinger, Mark},
abstractNote = {Increasing levels of financial support for customer-sited photovoltaic (PV) systems, provided through publicly-funded incentive programs, has heightened concerns about the long-term performance of these systems. Given the barriers that customers face to ensuring that their PV systems perform well, and the responsibility that PV incentive programs bear to ensure that public funds are prudently spent, these programs should, and often do, play a critical role in ensuring that PV systems receiving incentives perform well. To provide a point of reference for assessing the current state of the art, and to inform program design efforts going forward, we examine the approaches to encouraging PV system performance used by 32 prominent PV incentive programs in the U.S. We identify eight general strategies or groups of related strategies that these programs have used to address performance issues, and highlight important differences in the implementation of these strategies among programs.},
doi = {10.1016/j.rser.2007.01.002},
journal = {},
number = 4,
volume = 12,
place = {United States},
year = {Fri Jun 01 00:00:00 EDT 2007},
month = {Fri Jun 01 00:00:00 EDT 2007}
}

Conference:
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  • In the U.S., the increasing financial support for customer-sited photovoltaic (PV) systems provided through publicly-funded incentive programs has heightened concerns about the long-term performance of these systems. Given the barriers that customers face to ensuring that their PV systems perform well, and the responsibility that PV incentive programs bear to ensure that public funds are prudently spent, these programs should, and often do, play a critical role in addressing PV system performance. To provide a point of reference for assessing the current state of the art, and to inform program design efforts going forward, we examine the approaches to encouragingmore » PV system performance used by 32 prominent PV incentive programs in the U.S. We identify eight general strategies or groups of related strategies that these programs have used to address factors that affect performance, and describe key implementation details. Based on this review, we then offer recommendations for how PV incentive programs can be effectively designed to mitigate potential performance issues.« less
  • Some stakeholders continue to voice concerns about the performance of customer-sited photovoltaic (PV) systems, particularly because these systems typically receive financial support through ratepayer- or publicly-funded programs. Although much remains to be understood about the extent and specific causes of poor PV system performance, several studies of the larger programs and markets have shed some light on the issue. An evaluation of the California Energy Commission (CEC)'s Emerging Renewables Program, for example, found that 7% of systems, in a sample of 95, had lower-than-expected power output due to shading or soiling (KEMA 2005). About 3% of a larger sample ofmore » 140 systems were not operating at all or were operating well below expected output, due to failed equipment, faulty installation workmanship, and/or a lack of basic maintenance. In a recent evaluation of the other statewide PV incentive program in California, the Self-Generation Incentive Program, 9 of 52 projects sampled were found to have annual capacity factors less than 14.5%, although reasons for these low capacity factors generally were not identified (Itron 2005). Studies of PV systems in Germany and Japan, the two largest PV markets worldwide, have also revealed some performance problems associated with issues such as shading, equipment and installation defects, inverter failure, and deviations from module manufacturers' specifications (Otani et al. 2004, Jahn & Nasse 2004). Although owners of PV systems have an inherent incentive to ensure that their systems perform well, many homeowners and building operators may lack the necessary information and expertise to carry out this task effectively. Given this barrier, and the responsibility of PV incentive programs to ensure that public funds are prudently spent, these programs should (and often do) play a critical role in promoting PV system performance. Performance-based incentives (PBIs), which are based on actual energy production rather than the rated capacity of the modules or system, are often suggested as one possible strategy. Somewhat less recognized are the many other program design options also available, each with its particular advantages and disadvantages. To provide a point of reference for assessing the current state of the art, and to inform program design efforts going forward, we examine the approaches to encouraging PV system performance - including, but not limited to, PBIs - used by 32 prominent PV incentive programs in the U.S. (see Table 1).1 We focus specifically on programs that offer an explicit subsidy payment for customer-sited PV installations. PV support programs that offer other forms of financial support or that function primarily as a mechanism for purchasing renewable energy credits (RECs) through energy production-based payments are outside the scope of our review.2 The information presented herein is derived primarily from publicly available sources, including program websites and guidebooks, programs evaluations, and conference papers, as well as from a limited number of personal communications with program staff. The remainder of this report is organized as follows. The next section presents a simple conceptual framework for understanding the issues that affect PV system performance and provides an overview of the eight general strategies to encourage performance used among the programs reviewed in this report. The subsequent eight sections discuss in greater detail each of these program design strategies and describe how they have been implemented among the programs surveyed. Based on this review, we then offer a series of recommendations for how PV incentive programs can effectively promote PV system performance.« less
  • One promising approach for stimulating utility participation in the acquisition of cost-effective demand-side resources is called shared savings. In a shared-savings arrangement, the difference between the cost of a demand-side resource and its value measured in avoided supply-side resources is shared by utility shareholders and ratepayers. A shared-savings incentive mechanism consists of the three major components; the cost of the demand-side program, the amount of energy saved by the program, and the value of the supply-side activities avoided by the program. Measuring energy savings is an imperfect science. In principle, it should be performed after a demand-side program has beenmore » put in place and observed for some time. A particularly difficult measurement issue lies in properly accounting for effects that are not within the control of the utility but which affect energy savings (such as weather or occupant behavior). The collaborative decided to rely on prespecified engineering estimates of savings for individual measures, but to base aggregate savings on the actual numbers of installations made by the utility. This decision protects the utilities from uncertainties in the performance of individual measures while providing an incentive to increase program participation. The utilities also agreed to initiate comprehensive measurement programs to improve future estimates of the performance of energy efficiency measures. Avoided costs, like conservation program performance, are a subject to a large number of influences, only some which are under the control of the utility. Recovering the benefits of demand-side programs over a time period that closely parallels the realization of savings, means the utility will have to wait a considerable period of time before recovering its full share. The collaborative resolved this issue in a manner analogous to contractual agreements that pay qualifying facilities for non-utility generated power. 2 figs., 1 tab.« less
  • Abstract not provided.
  • It is recognized that, as facilities install increasingly stringent emission controls, further air quality gains at the individual facility level become incrementally smaller. Therefore, further reductions can be accomplished only through regional and multi-source sector emission reductions. It is also generally recognized that properly constructed and implemented incentive-based air quality management systems that rely on market forces rather than command and control forces, can achieve greater, cheaper, and faster emission reductions. This paper reports a study that examined the conceptual feasibility of instituting a multi-source sector, regional, incentive-based emission reduction system for the western United States. Both mobile source andmore » stationary source reduction strategies, as well as inter-sector emission reduction trading, were examined. The study was based on lessons learned from implementation of similar systems in both local (e.g., the South Coast Air Quality Management District RECLAIM program) and regional settings (e.g., the Title IV Acid Rain Program). These lessons were then applied to the uniqueness of the West (e.g., widely dispersed stationary sources and widely dispersed concentrations of mobile sources, over 280 individual Native American lands and governments, multiple state and local agencies, numerous Class 1 areas, etc.) to examine the feasibility of a multi-source sector regional incentive-based air quality management program. The study concluded: Implementation of a region-wide incentive-based emissions reduction program in the West that incorporates both mobile and stationary sources appears to be feasible, although there are considerable regulatory, administrative, political, and stakeholder hurdles that must be overcome to implement such a program; and, There do not appear to be major legal or institutional barriers that would prevent the use of such programs in the West.« less