A Financial and Policy Analysis of Small Photovoltaic Ownership for Investor-Owned Utility Customers in North Carolina
Abstract
As a source of clean distributed generation, small solar photovoltaic (PV) systems
for residential investor-owned utility (IOU) customers can yield significant benefits
to their owners along with a cleaner energy mix, strengthened economy, and improved
environment for all citizens of North Carolina. However, the major barriers to small
PV investments on a larger scale remain the high upfront costs and poor return on
investment. Yet, North Carolina has significant drivers, including declining costs
and strong policy, that may make such investments more attractive in the future.
This Master’s Project is split into two parts. Part I investigates the current policies
and incentives that impact small PV investment decisions for IOU customers in North
Carolina. Part II builds off the research gained from Part I in order to quantify
the financial attractiveness of such investments for an average Duke and Progress
Energy customer. Part II additionally performs scenario and sensitivity analyses
to assess if and when certain factors can significantly alter investment decisions.
The results of this project indicate that despite effective policies and incentives
in North Carolina, small PV ownership is still a financially unattractive investment—the
reference cases yield a net present value (NPV) of less than -$6,000 and -$8,000 for
the Progress and Duke customer, respectively. Yet, the impact that such policies
and incentives—namely the state and federal investment tax credits—have on these respective
NPVs should not be overlooked as they effectively increase the NPVs more than twofold.
At the same time, there are many opportunities to further improve the financial attractiveness
of such investments, including improvements in net metering policies, the state’s
Renewable Energy & Energy Efficiency Portfolio Standard requirements, and demand for
Solar Renewable Energy Credits.
In such manner, this report does not offer specific policy or financial recommendations.
Rather, it is an in-depth analysis of existing policies and economic factors intended
to provide both qualitative and quantitative insight for the benefit of small PV investors,
the PV industry, and decision makers in North Carolina.
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https://hdl.handle.net/10161/6778Citation
Kataoka, George (2013). A Financial and Policy Analysis of Small Photovoltaic Ownership for Investor-Owned
Utility Customers in North Carolina. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/6778.Collections
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