Investigation of existing financial incentive policies for solar photovoltaic systems in U.S. regions

Abstract

This paper analyzes some of the existing incentives for solar photovoltaic (PV) energy generation in the U.S. Four types of buildings (e.g., hospitals, large offices, large hotels, and secondary schools) located in five different U.S. states, each having their own incentives, are selected and analyzed for the PV incentive policies. The payback period of the PV system is chosen as an indicator to analyze and critique the effectiveness of each incentive by comparing the payback periods before and after taking the incentive into consideration. Then a parametric analysis is conducted to determine the influence of the variation in key parameters, such as PV system capacity, capital cost of PV, sell back ratio and the performance-based incentive rate, on the performance of the PV system. The results show how the existing incentives can be effectively used to promote the PV systems in the U.S. and how variations of the parameters can impact the payback period of the PV systems. Through the evaluation of the existing incentive policies and the parametric study, this paper demonstrates that the type and level of incentives should be carefully determined in policy-making processes to effectively promote the PV systems.

Keywords

• solar photovoltaic
• incentive analysis
• payback period
• parametric analysis