There are many factors that contribute to the economics of solar energy. The country will affect the amount of solar energy produced worldwide each year. China, for example, produced more than 55 GW of solar panels in 2012. This is roughly 150% of the world’s annual consumption. Additionally, government subsidies help lower solar panel production costs.
LCOE of the PV and ES combination generation system
It is important to consider the levelized cost or energy (LCOE) when evaluating the ES and PV systems. This metric helps in making the decision about which components of the system to invest in. However, LCOE is not perfect and decision-makers need to consider other indicators.
LCOE is the total cost for generating electricity. It includes the initial investment and ongoing operations. It is important in making investment decisions. It determines whether the project will be financially viable. If a system is not profitable, a firm will likely seek other means to generate electricity.
Renewable energy technologies have lower life cycle costs than conventional energy sources (coal, nuclear, combined cycle gas) and, thus, are more attractive than many other technologies. Based on both thin film solar panels and crystalline silicon, utility-scale sun has the lowest LCOE. Utility-scale solar also has a lower cost of operation than utility-scale wind. This is because utility-scale is more competitive in terms of costs.
Most potential can be realized in areas of the world where there are low LCOEs at less than 180 USD per MWh-1. These costs vary depending on where the country is located and what its latitude is. The U.K. and Northeastern U.S.A are the most affordable places to deploy RTSPVs. These regions have a cost of between 110 $ and 160 $ MWh-1 to fulfill country-specific potential.
The Levelized Cost of Energy or (LCOE) is an estimate of the energy cost of a combined solar and ES generation system. This calculation reflects the costs of production, transportation and installation for a PV/ES combined generation system. As a result, the LCOE will differ from the cost of generation.
Grid parity requires solar PV to be more affordable than traditional energy sources in certain regions. The price of electricity generated from PV plants has already reached this level in specific areas. However, it will soon be the most cost-effective option for large areas.
Because of the seasonal variability in solar radiation, the RTSPV potential can show seasonal fluctuations. The monthly global potentiy is between 1.84 and 2.61 PWh. The lowest levels are in December or January. The seasonal variability is greatest in areas above 45deg North. This includes Europe, Russia and the USA. Moreover, the intra-annual variation is highest in the West European region, where solar potential ranges between 94 and 255 TWh.