Photovoltaic Projects in Distributed Generation. Private Profitability or Environmental Sustainability?

Abstract

Renewable energies are strategic pillars for reducing gas emissions and atmospheric damage. It is recognized an exponential growth, highlighting solar energy and their photovoltaic installations, a key example of this is the scale of investments, especially in the north of Chile. In this context, this work aims to economically assess smaller-scale projects that are being built, such as those of Distributed Generation, calculating their private and social profitability, including an environmental economic assessment of projects in the Chillan - Chillan Viejo district, as a case study. To do this, Law 20,571 is analyzed. This law allows residential generators to sell their surplus energy to the electricity distributor at a regulated price. A study was made for 17 residential, agricultural, industrial and commercial installations, developing an analysis of the Net Present Value (NPV) and the Internal Rate of Return (IRR).The mobile consumption averages before and after their operations, direct payment, costs and income from the sale of surpluses were built. Likewise, income compensation for the sale of carbon credits was simulated. The results, both in private evaluation and environmental economic assessment, show unfavorable results, and it may be inferred that this type of project is not profitable in the sectors covered by the study, with the need for state support for the initial investment or the tariff. However, there is a dimension that goes beyond the economic that should underpin a supportive fiscal policy for the coming years.