Distributed Electricity Generation From Solar Photovoltaics In Chile: Techno-Economic Assessment For An Industrial Site In Santiago

Abstract

With some of the best solar resources of the world, Chile is positioned to vastly reduce its consumption of fossil fuels and ramp-up the share of renewables for electricity generation. Distributed generation facilities appear particularly attractive as a way to reduce the needs for power transmission capacity. This paper evaluates the technical and economic feasibility of installing a roof-top solar photovoltaic (PV) system on the facilities of a major shipping company in the city of Santiago. A computer based-model estimates hourly electricity generation during the life-time of the solar panels, as well as the expected electricity consumption, and corresponding injections/withdrawals of electricity to/from the main grid, to assess economic benefits. The model is composed of 3 modules: 1) A solar generation module; 2) an Electricity Demand module; and 3) an Economic Assessment model that estimates the costs and benefits associated to the installation of PV solar. Results indicate that under the baseline conditions, the Net Present Value of the project is negative, mainly due to the absence of subsidies to solar installations and to the low electricity prices offered to consumers under the Net Metering policy. However, when lower solar system installation costs, lower discount rates, or a payment for carbon emissions reductions are considered, the Net present value becomes positive.