Here is all you need to know about the COST of using Solar electricity in Nigeria

The benefits of solar power outweigh the costs – Scientists

Here is all you need to know about the COST of using Solar electricity in Nigeria

Over the past decade, the cost of solar photovoltaic (PV) arrays has fallen rapidly. But at the same time, the value of PV power has declined in areas that have installed significant PV generating capacity. Operators of utility-scale PV systems have seen electricity prices drop as more PV generators come online. Over the same time period, many coal-fired power plants were required to install emissions-control systems, resulting in declines in air pollution nationally and regionally. The result has been improved public health—but also a decrease in the potential health benefits from offsetting coal generation with PV generation.

Given those competing trends, do the benefits of PV generation outweigh the costs? Answering that question requires balancing the up-front capital costs against the lifetime benefits of a PV system. Determining the former is fairly straightforward. But assessing the latter is challenging because the benefits differ across time and place.

“The differences aren’t just due to variation in the amount of sunlight a given location receives throughout the year,”

says Patrick R. Brown PhD ’16, a postdoc at the MIT Energy Initiative. “They’re also due to variability in electricity prices and pollutant emissions.”

The drop in the price paid for utility-scale PV power stems in part from how electricity is bought and sold on wholesale electricity markets. On the “day-ahead” market, generators and customers submit bids specifying how much they’ll sell or buy at various price levels at a given hour on the following day. The lowest-cost generators are chosen first. Since the variable operating cost of PV systems is near zero, they’re almost always chosen, taking the place of the most expensive generator then in the lineup. The price paid to every selected generator is set by the highest-cost operator on the system, so as more PV power comes on, more high-cost generators come off, and the price drops for everyone. As a result, in the middle of the day, when solar is generating the most, prices paid to electricity generators are at their lowest.

Brown notes that some generators may even bid negative prices. “They’re effectively paying consumers to take their power to ensure that they are dispatched,” he explains. For example, inflexible coal and nuclear plants may bid negative prices to avoid frequent shutdown and startup events that would result in extra fuel and maintenance costs. Renewable generators may also bid negative prices to obtain larger subsidies that are rewarded based on production. 

Health benefits also differ over time and place. The health effects of deploying PV power are greater in a heavily populated area that relies on coal power than in a less-populated region that has access to plenty of clean hydropower or wind. And the local health benefits of PV power can be higher when there’s congestion on transmission lines that leaves a region stuck with whatever high-polluting sources are available nearby. The social costs of air pollution are largely “externalized,” that is, they are mostly unaccounted for in electricity markets. But they can be quantified using statistical methods, so health benefits resulting from reduced emissions can be incorporated when assessing the cost-competitiveness of PV generation.

Based on their findings, the researchers conclude that the decline in PV costs over the studied period outpaced the decline in value, such that in 2017 the market, health, and climate benefits outweighed the cost of PV systems at the majority of locations modelled. “So the amount of solar that’s competitive is still increasing year by year,” says Brown.

The findings underscore the importance of considering health and climate benefits as well as market revenues. “If you’re going to add another megawatt of PV power, it’s best to put it where it’ll make the most difference, not only in terms of revenues but also health and CO2,” says Brown. 

Unfortunately, today’s policies don’t reward that behaviour. Some states do provide renewable energy subsidies for solar investments, but they reward generation equally everywhere. Yet in states such as New York, the public health benefits would have been far higher at some nodes than at others. State-level or regional reward mechanisms could be tailored to reflect such variation in node-to-node benefits of PV generation, providing incentives for installing PV systems where they’ll be most valuable. Providing time-varying price signals (including the cost of emissions) not only to utility-scale generators but also to residential and commercial electricity generators and customers would similarly guide PV investment to areas where it provides the most benefit. 

Culled from