Distributed photovoltaic generation in Spain: analysis of the impact of energy regulation in the economic viability of photovoltaic installations for self consumption; UC3M Campus of Leganés case study

The aim of this paper is to evaluate the impact that energy regulation has on the viability of distributed PV applications for self-consumption. More precisely, the impact of the application of backup charges on self-consumption as well as the remunerating mechanisms for surplus of electricity injected into the grid. The current Spanish energy regulation is reviewed, together with those from the international panorama, applicable in some of the countries where distributed solar PV for self-consumption is more relevant. This is done in order to explore the impact of alternative regulatory mechanisms. The analysis is based on a hypothetical solar installation to be deployed at Carlos III University’s Campus of Legan´es. A solar potential analysis of the premises was carried out making use of PVSol Software. Furthermore, a tool was developed through Matlab for the techno-economic analysis of the investment. The main conclusions obtained from this analysis is that the application of variable backup charges for self-consumption has a very negative impact on the profitability of these projects, where the main purpose of the generated electricity is to be consumed locally. In fact, removing the variable backup-charge on self-consumption increases savings by around 24%. Under the current Spanish regulation, the project would not be economically viable, having a negative NPV and very low returns (3%). The implementation of an investment compensation mechanism improves the profitability of the project, having a positive NPV, but offering low returns (5.28%). The most profitable remuneration mechanism is found to be a feed-in-tariff, followed by a net metering mechanism. However, this does not produce a comparable increase in savings given the small percentage of electricity exported to the grid.Ingeniería de la Energí