The Role of Electricity Tariffs in the Adoption of Residential PV Systems and Carbon Emissions in Brunei Darussalam

Abstract

The residential sector in Brunei is the highest electricity consumer due to the cheap electricity tariff. The high consumption, primarily generated from natural gas, causes environmental harm. The government implemented a net-metering program to encourage the residents to adopt PV systems, but cheap tariffs hinder the adoption. Hence, this study aims to learn the role of electricity tariffs in adopting PV systems and consequently study the effects on the carbon footprint. This study calculated the sizes of the most cost beneficial PV systems under four electricity tariff structures: (1) current tariff, increasing block tariff (IBT), (2) previous tariff, decreasing block tariff (DBT), (3) proposed IBT tariff (mild), (4) proposed IBT tariff (aggressive). Then, economic feasibility and environmental studies were conducted. Lastly, this study investigated what the results would mean nationwide. The study found that under the current IBT and DBT, it is highly infeasible for the residents to install PV systems in terms of both economic and environmental. Under the mild IBT, the PV systems were calculated to have a payback period (PB) of 25 years and a return on investment (ROI) between -9.8% and 0.1%. On a positive note, the pollutant gas emissions can be reduced by 173,541kg/year nationwide, (14%) of the current emissions. Under the aggressive IBT scheme, the PB is between 18.02 and 22.93 years, and the ROI is between -1.8% and 1.7%. The total gas pollution in the country can be reduced by 254,212kg/year nationwide, 21% of the current emissions. Nationwide, implementing the mild IBT or the aggressive IBT can motivate the residents to install PV systems which could generate between 240 MW and 376 MW. Based on the results, although it is highly infeasible for the residents to install PV systems under all the tariff structures, there is a positive outcome in reducing carbon emissions and reaching the national renewable energy goal.