Public Support of Solar Electricity and its Impact on Households - Prosumers

Abstract

Abstract Background and Purpose: Currently, the idea of households - prosumers is broadly discussed in public governments, mainly in connection with both the energy security issues and the environmental issues. Therefore, the main goal of this paper is to present new agent model of household - prosumer and to compare two scenarios – “off grid household” and “on grid household”. The additional goal is to evaluate the impact of public support of solar electricity on the economic efficiency of household – prosumer projects (systems). Design/Methodology/Approach: The model is structured as a micro-level agent model, representing one household – prosumer. The model has the following general characteristics: one household with own electricity generation (photovoltaic panels), battery and in case of “on grid household” also connection to the grid. The main goal of the agent is to cover electricity consumption in household with minimal costs. The agent model of prosumer is tested and validated, using the empirical data. Results: The highest level of subsidy has significant impact on the economic indicators of selected scenarios. It causes lower investment costs at the beginning of the project and consequently shorter payback period (3-4 years earlier), positive cumulative cash flow, net present value and IRR in earlier period (approximately 5-10 years earlier, depending on the scenario). Conclusion: We can recommend to the government to continue with current system of subsidies, since it contributes to better economic indicators of particular solar electricity projects. On the other hand, the level of subsidy should be at least the same as in current year 2017, for the purposes of representing the significant part of the investment costs. Low level of subsidy has negligible impact on the economic indicators of households – prosumers projects. The developed agent model is suitable for the evaluation of economic impact of public support on households – prosumers.