November 5, 2014
ability to accurately calculate the value of solar can be a useful tool for helping to integrate increasing amounts of distributed solar PV onto the grid. It’s also a critical tool that can help utilities, regulators and stakeholders make rational planning decisions and design effective incentives as they integrate distributed energy with the century-old power grid.
Determining the value of solar (VOS), however, is a tricky proposition. Factors such as the social benefits of renewable energy and the long-term value of avoided greenhouse gas emissions are difficult to quantify. There are also questions of equitability that need to be addressed related to who benefits from distributed solar and how solar is treated relative to conventional generation projects.
The methodologies currently used for evaluating the costs and benefits of distributed solar are all over the map. According to a new report from ICF International, “Utilities, investors, and markets are missing out on optimal strategies to price assets, lower costs, and mitigate risks, because they lack a consistent and accurate approach for determining the true value of solar.”
It will become increasingly important to find a consistent method for calculating the value of solar as solar becomes a larger part of the energy generation mix, according to the authors. In the period between mid-2012 to mid-2014, cumulative solar PV installations in both the residential and non-residential domains both doubled. GTM Research predicts that distributed solar installations on commercial and residential premises will grow from 1.9 gigawatts in 2013 to 5.8 gigawatts by 2018. For Full Article.