Investment Determinants in Self-Consumption Facilities: Characterization and Qualitative Analysis in Spain

Abstract

Self-consumption energy facilities are presented as viable and sustainable solutions in the energy transition scenario in which many countries are immersed. However, they rely on dispersed and private investments in the territory. Given the uneven growth in the number of self-consumption facilities in Europe, the main objective of this study is to identify and measure the investment determinants in self-consumption facilities. To this end, the main influential incentives and barriers are identified through the aggregate analysis of the regulatory framework for self-consumption in several European countries, and the empirical characterization of Spanish facilities as a multiple case study, to define the common features of the investments made. The technical, economic, and financial characterization of real self-consumption facilities in climatic zones of southern Europe is a significant contribution of the present work. There are few samples of this type in the studies published to date, which have mainly been prepared from case studies or statistical data without identifying particular facilities. Cost-related variables have been identified as the most important variables in private investment decisions, and potential influential factors on these variables that could be regulated have been pointed out as relevant. It is also worth highlighting the elaboration of an analytical framework based on this conceptual approach, which has been proven to be useful to depict regulatory scenarios and to compare the positioning for the development of self-consumption systems in different countries. A model that transfers the influence of the determining factors to the deployment of self-consumption under specific regulatory scenarios has been developed and applied to the case of Spain. As a general reflection, to increase the adoption of this kind of technology and encourage consumers to make private investments, policies for renewable energy must consider self-consumption and microgeneration as the main axis, by increasing the availability of energy when necessary. For instance, the promotion of energy storage from these kinds of facilities could receive priority treatment, as well as rewarding the electricity surplus in the interests of security of supply in a period of energy transition towards a new, more sustainable model. Incentive schemes, aids to compensate for the additional costs resulting from the battery storage or easing restrictions in terms of contracted power would foreseeably increase the rates of adoption of the technology, favoring its faster development in terms of research and development and product innovation.

The progressive adoption of a circular economy by businesses for cleaner production: An approach from a regional study in Spain

“…The activities included in the first group (level I) are performed by 61.5% of the companies in the sample, and only 14.42% of them carry out the activities in the last group (level IV). The particular situation is emphasised of activity number 4 --which measures the exploitation of renewables by firms, receiving less consideration than other activities of the second group because of a stringent national regulation of self-consumption facilities that limits the net balance and is considered to be a barrier to the exploitation of renewables, such as photovoltaics, in Spanish firms (Gimeno et al, 2018).…”

A study on the factors affecting household solar adoption in Kerala, India

“…There have been mixed findings in the literature on the efficacy of these dedicated mechanisms. Partially, the failure of these mechanisms and mixed findings in the literature have been attributed to the inability of policymakers and researchers alike in understanding the bandwidth of drivers and inhibitors of the investment decision process and to fit the broader socio-economic context in which they are deployed (Sener et al , 2018; Gimeno et al , 2018; Masini and Menichetti, 2013). Hence, the pointers – limited effectiveness of policy-level mechanisms along with the frivolous understanding of the multitudes of considerations taken by the private investor – suggest the need for a deeper understanding of the processes through which these economic agents arrive at an investment decision on rooftop PV.…”

“…This is so when increasing evidence points to the limitations of assumptions of rationality in investment decisions in general and in energy systems specifically. Recent researches in the energy system highlight the need for inclusion of broader context of social and psychological considerations in energy-related investment decisions (Sener et al , 2018; Gimeno et al , 2018; Masini and Menichetti, 2013). Behavioural finance and the bounded rationality landscape have long challenged the validity of the rational-actor models of classical economics in many decision-making contexts.…”

Simulation and Comparison of Mathematical Models of PV Cells with Growing Levels of Complexity

“…Although free and available on a planetary scale, the role in the global energy mix is unobtrusive, competing not only with other forms of non-renewable energy, such as gas and coal [6], but also with its more direct rival-the wind renewable energy source [7]. Except for a very limited number of countries where proactive and generous income policies were implemented at the beginning of the last decade, there has been a more recent mobilization of European governments in this sector, legislating on specific instruments to stimulate production decentralized and small scale power [8]. In the last few years, the solar energy has been gaining importance in the worldwide energy evolution tendency due to a constantly increasing efficiency and lifespan, the decrease of the price of PV modules and by being environmentally friendly [9].…”