21.1.4
Figure 21.1: Illustrating grid consumption, grid injection and self consumption (reproduced with kind permission from
the European Photovoltaic Industry Association (EPIA)) [135].
Direct consumption can be achieved in many ways. An unfavourable option would be
to limit the PV system size to make sure that the peak power produced is always lower
than the peak power consumed. This, of course, would limit the PV capacity of an
individual or a community. Other techniques include using storage in various ways, for
example batteries. This way, the orange part of the curve in Figure 21.1 will be used to
charge the battery, which will be discharged in the ‘grid consumption’ area.
Different policies can be introduced to encourage direct consumption. Pure net
metering, which treats a prosumer equally in consumption and production does nothing to
encourage self-consumption as it simply pays the prosumer retail costs of energy back to
the grid. However, adjusting feed-in tariffs to be lower than retail energy is a typical
scheme used by countries such as Germany and Italy to encourage direct consumption in
PV systems.
It is worth repeating that the issue of grid instability can occur well before PV reaches
penetrations of 100%. Even if as little as one-third of a grid is being powered by PV,
instantaneous power levels can easily rise above demand at peak hours causing energy to
be curtailed. For this reason, companies such as Solar City in the United States are already
making plans to include batteries with PV systems as early as 2015 [177].
Levelized cost of electricity
Another very important concept is the levelized cost of electricity (LCoE), which is
defined as the cost per kWh of electricity produced by a power generation facility. It is
usually used to compare the lifetime costs of different electricity generation technologies.
To be able to estimate the effective price per kWh, the concept of LCoE allocates the costs
of an energy plant across its full lifecycle. It is somehow similar to averaging the upfront
Figure 21.1: Illustrating grid consumption, grid injection and self consumption (reproduced with kind permission from
the European Photovoltaic Industry Association (EPIA)) [135].
Direct consumption can be achieved in many ways. An unfavourable option would be
to limit the PV system size to make sure that the peak power produced is always lower
than the peak power consumed. This, of course, would limit the PV capacity of an
individual or a community. Other techniques include using storage in various ways, for
example batteries. This way, the orange part of the curve in Figure 21.1 will be used to
charge the battery, which will be discharged in the ‘grid consumption’ area.
Different policies can be introduced to encourage direct consumption. Pure net
metering, which treats a prosumer equally in consumption and production does nothing to
encourage self-consumption as it simply pays the prosumer retail costs of energy back to
the grid. However, adjusting feed-in tariffs to be lower than retail energy is a typical
scheme used by countries such as Germany and Italy to encourage direct consumption in
PV systems.
It is worth repeating that the issue of grid instability can occur well before PV reaches
penetrations of 100%. Even if as little as one-third of a grid is being powered by PV,
instantaneous power levels can easily rise above demand at peak hours causing energy to
be curtailed. For this reason, companies such as Solar City in the United States are already
making plans to include batteries with PV systems as early as 2015 [177].
Levelized cost of electricity
Another very important concept is the levelized cost of electricity (LCoE), which is
defined as the cost per kWh of electricity produced by a power generation facility. It is
usually used to compare the lifetime costs of different electricity generation technologies.
To be able to estimate the effective price per kWh, the concept of LCoE allocates the costs
of an energy plant across its full lifecycle. It is somehow similar to averaging the upfront