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Probabilistic evaluation of solar photovoltaic systems using Bayesian networks: a discounted cash flow assessment
Author(s) -
Leicester Philip A.,
Goodier Chris I.,
Rowley Paul
Publication year - 2016
Publication title -
progress in photovoltaics: research and applications
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.286
H-Index - 131
eISSN - 1099-159X
pISSN - 1062-7995
DOI - 10.1002/pip.2754
Subject(s) - photovoltaic system , discounted cash flow , cash flow , environmental economics , electricity , probabilistic logic , photovoltaics , bayesian network , econometrics , variable renewable energy , computer science , economics , electric power system , engineering , finance , artificial intelligence , electrical engineering , power (physics) , physics , quantum mechanics
Solar photovoltaic (PV) technology is now a key contributor worldwide in the transition towards low‐carbon electricity systems. To date, PV commonly receives subsidies in order to accelerate adoption rates by increasing investor returns. However, many aleatory and epistemic uncertainties exist with regard to these potential returns. In order to manage these uncertainties, an innovative probabilistic approach using Bayesian networks has been applied to the techno‐economic analysis of domestic solar PV. Empirical datasets from over 600 domestic PV systems, together with national domestic electricity usage datasets, have been used to generate and calibrate prior probability distributions for PV yield and domestic electricity consumption, respectively, for typical urban housing stock. Subsequently, conditional dependencies of PV self‐consumption with regard to PV generation and household electricity consumption have been simulated via stochastic modelling using high temporal resolution demand and PV generation data. A Bayesian network model is subsequently applied to deliver posterior probability distributions of key parameters as part of a discounted cash flow analysis. The results illustrate the sensitivity of PV investment returns to parameters such as PV self‐consumption, PV degradation rates and geographical location and quantify inherent uncertainties when evaluating the impact of sector‐specific PV adoption upon economic indicators. The outcomes are discussed in terms of the value and impact of this new Bayesian approach in terms of supporting robust and rigorous policy and investment decision‐making, especially in post‐subsidy contexts globally. © 2016 The Authors. Progress in Photovoltaics: Research and Applications published by John Wiley & Sons Ltd.