Distributed Renewable Energy Operating Impacts and Valuation Study

Section 2
• The forecast of the anticipated future costs of PV systems has a major impact on the
technology adoption. As a result, the DOE forecast showing aggressive cost reductions
over a fairly short period of time in the near future (see Figure 2-3) swing the level of
adoption of PV systems from one extreme to the other. This is the major driver in the
differences between the High and Low Penetration Cases.
• In trying to establish an upper and lower limit of the level of deployment for the Market
Adoption scenario, a number of key factors were identified and modeled. The values and
the timing of the factors need to be investigated in more detail to ensure that both scenarios
present realistic forecasts. Areas of further investigation and model refinement may include
the following:
• Tax credits are assumed to remain in effect throughout the duration of the period of
analysis.
• While the level of incentives is modeled to decrease, it is assumed that some level of
rebates will be offered throughout the duration of the period of analysis.
Results of Market Simulation Modeling - Residential
As can be seen in Figure 2-26, with the assumptions in the High Penetration Case, residential
installations of PV and SHW result in a combined annual energy impact of roughly 2,917,000
MWh in 2025, which significantly exceeds the target RES goal of 913,475 MWh. The total
energy impact is attributable largely to PV installations, which represent about 93 percent
(2,713,000 MWh) of the total, with SHW installations accounting for the remaining seven
percent (203,000 MWh). Continued incentives for PV combined with assumed technology cost
reductions over the simulation period are largely responsible for PV capturing a much greater
share of the energy impact than SHW in the High Penetration Case.
Figure 2-26: Residential Market Potential – High Penetration Case
3,000,000
MWh
2,500,000
2,000,000
1,500,000
1,000,000
500,000
PV
SHW
0
2008
2010
2012
2014
2016
2018
2020
2022
2024
RES
Goal
2-48 R. W. Beck, Inc. Arizona Public Service