Quantifying Residential PV Economics in the US: Payback vs Cashflow Determination of Fair Energy Value

States: National,
Resource Type: Report

Adoption Year: 2006
Abstract: Payback is often used as a measure of profitability by prospective PV owners. Contrasting this measure with another financial gauge -- life-cycle cash flow -- the paper discusses why payback may not be the most appropriate measure for residential PV applications and why it may hide sound financial opportunities for those deciding to invest in a PV system. In parallel, the paper addresses another aspect of economic feasibility: the value of energy produced. For residential applications, this value is currently set at residential net-metered retail rates. We present preliminary evidence that a higher value, reflective of the local effective capacity of PV ought to be claimed for residential PV applications.
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