Fundamental value of distributed Photovoltaic energy production around the world
||Fundamental value of distributed Photovoltaic energy production around the world
||22nd Annual European Real Estate Society Conference in Istanbul, Turkey
||Background – Photovoltaic (PV) panels are an important component of passive and positive energy buildings. The value of the PV depends on the price of the electricity and on the quantity of energy produced. PV investors does not want to maximize the quantity of energy produced but the cash flow generated by the electricity produced. Electricity prices are cyclical, so is they depends on the time of the days and on the day of the year. Electricity prices are different around the globe, so are solar radiation. The optimum combination of high price and high radiation is not easy to find. The best locations to install PV panel are locations where radiation and prices combination merge together to create the maximum value.__Purpose – This paper intend to present a method that integrate weather data and market price dynamic in order to find the fundamental value of distributed PV production. In a second time, we use this approach to find the fundamental value of distributed PV production around the globe for 30 locations and 60 different climate readings.__Design– We use standard weather data from two sources. These data source give information about the radiation available for each hour of the year. We use historical electricity price data and official authority forecast to forecast the future electricity price path. We then optimize the position of the PV panel in order to achieve the higher present value of the energy sold over the life cycle of the PV panel, including standard technology decay. This optimum positioning maximize the cash flow generated by PV panels and therefore should be considered as PV fundamental value.__Results – As of now, results are preliminary but at the time of the conference, we will have the fundamental value for each location. We already know that some location among the best location are surprising.__Limitations / implications – Electricity price data source quality are not the same for each jurisdiction. Future energy price is a combination of historical price, for the hourly price pattern, and official forecast, for growth rate path. Obviously the results are dependent on their reliability.__Practical implications – Investors choice of investment and policy maker decision can be impacted by the results.__Originality / Value – We analyze the fundamental value for a number of locations. Second, we analyze the robustness of the result obtain with different data sources.
||Distributed photovoltaic, Real estate, Electricity prices, Weather
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||Green Buildings & Environmental Policies
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