Advancing the Adoption of Net Metering: An Economic Assessment of Grid-Tied Solar Photovoltaic Systems in Urban Homes in Ghana

Abstract

Net metering schemes are pivotal in advancing grid-tied solar PV systems and promoting renewable energy adoption in developing nations. This study investigates the economic viability of implementing net metering within urban households in Ghana, considering the existing block tariff structure and a proposed time-of-use (ToU) structure for grid-tied PV systems. The study employed PVSOL premium (2023 R3) software for the economic performance assessment of the net metering schemes for simulated grid-tied residential PV systems in selected cities of Ghana’s Coastal, Forest, and Savannah climatic zones. The evaluation encompasses key economic metrics, including the levelized cost of electricity, accrued cash flow, annual cash savings, internal rate of return, and payback period. The study findings showed that, in most scenarios, the existing block tariff structure initially proved more economically favourable than the proposed two-tier Time-of-Use (ToU) structure. Consequently, financial investments were recouped within the project’s lifespan under net metering schemes based on the existing block tariff structure, whereas investments were not recouped under the ToU-based schemes. Nevertheless, factors such as improved daytime consumption, rising electricity tariffs, and aligning peak demand pricing hours with solar power generation hours emerged as potential drivers that could make ToU-based net metering schemes more attractive than block tariff structures. The study findings have significant implications for policy development related to tariff structures, particularly concerning the implementation of net metering for grid-tied solar PV systems within the residential sector of Ghana and other developing countries in sub-Saharan Africa.