Replicating PVWatts economic analysis for cost/financed_kWh

  • Jim McLain
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31 Aug 2016 15:09 #4734 by Jim McLain
PVWatts offered a valuable solar value estimate to consumers, that was disabled recently. PVWatts presented an "Initial Economic Comparison" that included a "Cost of Electricity Generated by System" estimate(for a financed system) with a "Average Cost of Electricity Purchased from Utility". This was an excellent approach to inform consumers of the solar value proposition, reducing it to a simple kWh commodity comparison.

1. What's the future of PVWatts? Please consider your own studies, that the residential solar finance industry is evolving towards host ownership with financing (as opposed to TPO), and a credible source to help consumers make informed decisions is very important to this evolution, even if PVWatts excluded volatile (erroneous) State incentives (most of which could be factored in by consumers), preserving only FTC incentives in the PVWatts calculations.
2. How did PVWatts determine the "Cost of Electricity Generated by the System"? Using PVWatts' financing assumption ("25 year loan@7.5%, no tax deduction") and dividing that loan's monthly payment by the average monthly kWhs generated by the system, the value presented was lower by about $0.02/kWh, implying that other factors influenced the presented value.
3. Did PVWatts, like SAM, factor in an inflation rate (and/or utility price escalation rate)that accounts for this difference?
4. Notwithstanding LCOE, is there a way to replicate the PVWatts presentation of utility kWh cost vs financed solar kWh cost in SAM?

Thank you.

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  • pgilman
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31 Aug 2016 15:17 #4735 by pgilman
Dear Jim,

Your question is about a feature of the web version of PVWatts. I believe that feature was disabled because the underlying assumptions were not visible in the user interface, and making them visible would have made the interface more complicated that is appropriate for that application.

SAM and the PVWatts web application both use the same model. In SAM, you can run PVWatts with any of the fully developed financial models, so that is the best place to do that kind of analysis.

I agree with your observation that it would be useful to have a simple way to calculate the value of the electricity generated by a PV system. In order for the calculation to be meaningful and transparent, it is important that the assumptions be visible, and it is not clear how to do that in a simple way.

In any case, please provide feedback or ask questions about the PVWatts web application from the PVWatts website: The Feedback button should lead you to an email address to do that.

Best regards,
Paul.

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