Facilitating Investment in Photovoltaic Systems in Iran Considering Time-of-Use Feed-in-Tariff and Carbon Market

Abstract

Photovoltaic (PV) systems are the leading solutions for reducing carbon dioxide (CO2) emissions in Iran’s energy system. However, there are some challenges to investing in PV systems in Iran, such as the low energy market price and the high investment cost of PV systems. Although the flat feed-in tariff (FiT) is defined to help purchase energy from the PV systems, it is not attractive to investors. In this paper, a mathematical formulation is developed for the planning problem of the PV systems with battery energy storages (BESs) considering two incentive policies: (1) Designing time-of-use FiT to encourage the PV systems to sell energy to the grid at peak hours (2) Participating in the carbon trading energy market. The insolation in Iran is calculated regarding mathematical formulations which divide Iran into eight zones. The results of the base case show high payback periods for all zones. In the presence of the incentive policies, the payback period decreases considerably from 5.46 yrs. to 3.75 yrs. for the best zone. Also, the net present value increases more than 170 percent in some zones compared to the base case.