Photovoltaic economics: Cost-effective for some choosing least-cost power in the marketplace

A survey of published and ongoing valuation research indicates that grid-connected photovoltaic (PV) technology is at or close to cost-effectiveness, from the utility and consumer points of view, in an increasing but carefully selected array of distributed utility applications. This conclusion is based on conventional analyses of utility avoidable costs (energy, effective load carrying capability, and transmission and distribution costs including line losses) and customer benefits (energy and demand bill savings, tax benefits). It may provide the basis for regulatory review of utility transmission or distribution investments to test prudence or usefulness. The conclusion would be stronger with consideration of the values of risk mitigation, power quality, strategic value, and customer preference. The underlying economic conclusions prevail irrespective of the structure of the utility industry. However, the analysis is site-specific so its broad application depends on easily operated analytical tools. Finally, social values justify social investment in PV.