EFFECT OF CARBON TAX AND ELECTRICITY BUY-BACK ON THE OPTIMAL ECONOMIC ADOPTION OF PV SYSTEM FOR RESIDENTIAL BUILDINGS

Abstract

Photovoltaic (PV) systems have been introduced around Japan for the energetic, economic and ambient benefits, and expected to be diffused more and more. The nation target for PV capacity in Japan is 4.82 GW in 2010. To achieve the target, several support programs, such as subsidization to capital cost, green credit and electricity buy-back, have been already introduced. Carbon tax is still under consideration, but there have been several researches about its feasibility and viability. Ministry of the Environment said in a statement that the tax should be 2.4 Yen/kg-C. In this paper, five scenarios with various carbon tax rates and electricity buy-back prices for the adoption of grid-connected PV system in residential buildings have been studied. A previously developed evaluation model MinSC has been employed for analysis. The effect of carbon tax and electricity buy-back price on economic benefits of PV system in residential buildings has been discussed. The result indicates that there is an optimal PV capacity for a certain scenario when considering the minimum annual energy cost. And both carbon tax and electricity buy-back stimulates the adoption of PV system. However, the carbon tax makes the PV system better off in a relative sense and results in absolute cost increase.