Economic evaluation of residential grid connected PV systems based on Net- Metering and Feed-in-Tariff schemes in Palestine

Abstract

Net-Metering and Feed-in Tariff  schemes used for accounting the energy of PV grid connected systems in Palestine are discussed and evaluated in this paper. Net- Metering  scheme includes two main items that have a negative effect on the economics of the PV system. The first item is represented in monthly subtraction of 25% of the excess PV energy, as compensation for utilizing the electric grid and the second one is striking off the excess PV energy at the end of each year instead of carrying it forward to next year. Economic analysis of PV grid connected system certifies that Net-Metering reduces the income of the PV system and therefore does not encourage enough the widening use of PV systems.  Considering Net-Metering, a PV system of 5 kWp with an annual yield of 8686 kWh installed on a house with an annual consumption of 6984  kWh, 19% of  total annual PV energy generated will not be credited which results in a net present value of  5126 $, an internal rate of return of 17.3% and a payback period of 7.6 years. On the other hand, the same analysis were used to evaluate the same system with Feed-in Tariff, where the total annual PV energy will be credited, the results were 7991 $, 22%  and 5.7 year respectively. Moreover, the performed analyses show that the Net- Metering is sensitive to load profile variation even at constant annual energy load. For this case, different economic parameters were obtained for different two load scenarios.