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Forecasting price parity for stand-alone hybrid solar microgrids: an international comparison

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Abstract

This work quantitatively analyzes the evolution of hybrid stand-alone microgrids in the US, Germany, Pakistan and South Africa to determine the grid price parity date for a solar PV/Diesel/Battery hybrid system in each market. The energy system model and NREL’s HOMER software are used to simulate the microgrid operation and forecast the levelized cost of electricity into the future for each location, with results ranging from 35–52 cents/kWh. This cost/kWh is compared with projected grid electricity prices at each location to determine parity dates. Analysis results reveal that grid parity is primarily a result of higher power prices or unreliable grids rather than declining microgrid costs. For Pakistan, grid parity is already here for microgrids, while Germany hits parity in the 2023–2040 timeframe. Results for South Africa and the US suggest that places with low grid prices hit parity after the year 2040. Sensitivity analysis results reveal the significant impact of financing on the year of grid parity, particularly in developing markets. We also show that policy measures to eliminate uncertainty and improve financing could push this grid parity years or decades earlier in developing economies where such microgrids may find a greater utility at present or in the near future.

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  1. Department of Public Policy, Rochester Institute of Technology, Rochester, NY, 14623, USA

    Jawad Siddiqui & Eric Hittinger

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  1. Jawad Siddiqui
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Correspondence to Eric Hittinger.

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Siddiqui, J., Hittinger, E. Forecasting price parity for stand-alone hybrid solar microgrids: an international comparison. Energy Syst 9, 953–979 (2018). https://doi.org/10.1007/s12667-017-0237-9

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