The Cities and the Sun: The Grid Parity of Electricity Generation with Photovoltaic Systems in Colombian Households

Abstract

The self-generation of electricity from solar sources has been boosted worldwide in several regions, which have implemented electricity sales policies from households to the grid. This paper aims at evaluating household savings by implementing these policies. The auto-generation of electricity from solar sources is evaluated in territories with moderate electricity costs and high solar radiation. A financial model forecasts the cash flows for a photovoltaic system in a typical household. The model compares it to the cash flows of buying the electricity from the national grid, by analyzing three financial indicators: the levelized cost of electricity, the internal rate of return of the project, and the recovery period of the investment. Furthermore, the possible scenario of carbon dioxide emission reduction is analyzed. The implementation of grid sales schemes increases the savings of households with the self-generation of electricity from solar sources. In the case of Medellín city, the new regulation for sales allowed an additional 20% savings. Medellín achieves network parity for configurations with a generation capacity of 0,7kW without batteries. This article broadens the understanding of new self-generation technologies for households in Latin American territories. Furthermore, it quantifies the impact of electricity sales regulations in the territories, used for the popularization of photovoltaic systems.