Performance and Economic Analysis of Grid-connected Residential PV DG Systems under Net Metering in Pakistan

Abstract

In Pakistan, the National Electric Power Regulatory Authority (NEPRA) in 2015 has introduced net metering incentive, which allows the distributed generation systems of photovoltaic (PV) and wind (from 1kWp up-to 1MWp) to sell excess units of electricity to the grid, and net them off against the units consumed from the grid. The objective is to proliferate and facilitate the use of renewable energy resources for green energy production and also to counter the electricity crisis prevalent in the country. This paper presents a detailed performance and economic analysis of residential consumers of one of the distribution companies in Pakistan, Islamabad Electric Supply Company (IESCO), having solar distributed generation (DG) systems of 3kW, 5kW, and 10kW with net metering. Using HOMER Pro®, a micro grid optimization software, a detailed economic and performance analysis has been performed. Economic analysis includes the net present cost (NPC), levelized cost of electricity (LCOE), internal rate of return (IRR), return on investment (ROI), and simple payback period of the system. Results indicate that as the generation capacity of DG is increased, the LCOE and payback period is reduced while IRR and ROI is increased, which signify the usefulness of net metering policy for the customers. Performance analysis include energy sold to and purchased from the grid, and monthly average electrical production of the DG systems. Finally, some recommendations are made for any further work in this area.