Framework for Assessing the Economics of Solar PV in the Electric Utility Industry

Solar photovoltaics (PV) makes up a small but rapidly growing portion of the nation’s electric generation capacity. Notwithstanding the increasing popularity and growth, questions remain regarding the basic costs and benefits, the nature and magnitude of subsidies, impacts on electric rates, and cost shifting among utility customers. This presentation provides an analytical framework for assessing the economics of solar PV within the electric utility sector. The intent is not to offer conclusions on the merits of solar PV as a power resource, but rather to present an analytical framework that may help decision makers assess the benefits and costs, and manage the trade-offs inherent in the use of this technology. 


James Cater

Director, Economic &Financial Policy
American Public Power Association