Quantifying residential PV economics in the US––payback vs cash flow determination of fair energy value

Payback is often used as a measure of profitability by prospective PV owners. Contrasting this measure with another financial gauge––life-cycle cash flow––the paper discusses why payback may not be the most appropriate measure for residential PV applications and why it may hide sound financial opportunities for those deciding to invest in a PV system. In parallel, the paper addresses another aspect of economic feasibility: the value of energy produced. For residential applications, this value is currently set at residential net-metered retail rates. We present preliminary evidence that a higher value, reflective of the local effective capacity of PV ought to be claimed for residential PV applications. 2004 Elsevier Ltd. All rights reserved