We estimate the lifetime magnitude and distribution of the private and public benefits and costs of currently installed distributed solar PV systems in the United States. Using data for recently-installed systems, we estimate the balance of benefits and costs associated with installing a non-utility solar PV system today. We also study the geographical distribution of the various subsidies that are made available to owners of rooftop solar PV systems, and compare it to distributions of population and income. We find that, after accounting for federal subsidies and local rebates and assuming a discount rate of 7%, the private benefits of new installations will exceed private costs only in seven of the 19 states for which we have data and only if customers can sell excess power to the electric grid at the retail price. These states are characterized by abundant sunshine (California, Texas and Nevada) or by high electricity prices (New York). Public benefits from reduced air pollution and climate change impact exceed the costs of the various subsidies offered system owners for less than 10% of the systems installed, even assuming a 2% discount rate. Subsidies flowed disproportionately to counties with higher median incomes in 2006. In 2014, the distribution of subsidies was closer to that of population income, but subsidies still flowed disproportionately to the better-off. The total, upfront, subsidy per kilowatt of installed capacity has fallen from $5200 in 2006 to $1400 in 2014, but the absolute magnitude of subsidy has soared as installed capacity has grown explosively. We see considerable differences in the balance of costs and benefits even within states, indicating that local factors such as system price and solar resource are important, and that policies (e.g. net metering) could be made more efficient by taking local conditions into account.
While they are rare, widespread blackouts of the bulk power system can result in large costs to individuals and society. If local distribution circuits remain intact, it is possible to use new technologies including smart meters, intelligent switches that can change the topology of distribution circuits, and distributed generation owned by customers and the power company, to provide limited local electric power service. Many utilities are already making investments that would make this possible. We use customers' measured willingness to pay to explore when the incremental investments needed to implement these capabilities would be justified. Under many circumstances, upgrades in advanced distribution systems could be justified for a customer charge of less than a dollar a month (plus the cost of electricity used during outages), and would be less expensive and safer than the proliferation of small portable backup generators. We also discuss issues of social equity, extreme events, and various sources of underlying uncertainty.
more » « less- PAR ID:
- 10030666
- Publisher / Repository:
- Wiley-Blackwell
- Date Published:
- Journal Name:
- Risk Analysis
- Volume:
- 38
- Issue:
- 2
- ISSN:
- 0272-4332
- Page Range / eLocation ID:
- p. 272-282
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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