A study of the buying price of photovoltaic electricity under a carbon tax regime

Abstract

Assuming that photovoltaic (PV) systems are adopted in residential houses under a carbon tax regime, the economic performance of PV systems is investigated from the standpoint of an electric utility. The economic performance is estimated by using the buying price of PV electricity and the PV economic index, which is defined as the ratio of the buying price to the generation cost of the electric utility. Because these values depend on electric power development and operation, the best mix and the operation of power plants are obtained by linear programming subject to restrictions on power generation. Then, the buying price of PV electricity is calculated from the total cost of the electricity utility. The buying price means the upper limit at which the electric utility never suffers a loss. The buying price is also compared with the power generation cost. The parameters are the prevalence attainment ratio of PV systems (0 to 100%), the upper limit of newly developed nuclear power plants (0 to 4GW/10 y), and the generated energy ratio of coal-fired thermal plants (0 to 15%). Chubu Electric Power Company, Inc. is used as the electric utility. The calculation results show that the buying price of PV electricity increases linearly with increasing carbon tax rate, and its values are 9 and 11.5 yen/kWh when the carbon tax rate is 0 and 25 thousand yen/t-C, respectively, which does not depend on the prevalence attainment ratio of PV systems and the upper limit of newly developed nuclear power plants. It is not the carbon tax rate but the newly developed nuclear power plant that influences the PV economic index. The values of the PV economic index are 1.35 to 1.45 and 1.50 to 1.60 when the newly developed nuclear power plant capacity is 0 and 4 GW/10 y, respectively. These results show that the economic performance of PV systems is increased by developing nuclear power plants at a certain rate and introducing a carbon tax.