Determination of Cost-Reflective Feed-in Tariff for Grid Connected Solar PV Systems in Lesotho

Abstract

Lesotho needs a feed-in tariff policy that can help accelerate integration of renewable energy in its electricity grid. In this study a method to determine the feed-in tariff for grid connected solar Photovoltaic (PV) systems was developed. The necessity to set different tariffs for different locations in terms of the solar PV array yield 𝑌, and different tariffs for different installed capacities were examined. Location specific tariffs were examined because given a particular solar module, the array yield 𝑌 could vary with location because of different ambient temperature and radiation, while size specific tariffs were examined because solar PV systems have different specific costs for different system sizes. In order to determine the cost reflective feed-in tariff, the Levelized Cost of Electricity (LCOE) was used as the objective function. With this approach the feed-in tariff was set as the price for selling electricity that is reasonably above the unit cost of production. A custom spreadsheet model was used to calculate the solar PV array yield 𝑌 over Lesotho. This array yield was used to divide Lesotho into two regions, low yield regions, and high yield regions. Representative systems were chosen and the feed-in tariff for different solar PV installed capacities in both regions were determined. The study found that the feed-in tariff varies with location and system size as follows; System Category FiT ($/kWh) Low Array Yield Region High Array Yield Region 30 kWp Roof Mount 0.1778 0.1616 500 kWp Roof Mount 0.1597 0.1451 30 kWp Ground Mount 0.1740 0.1581 500 kWp Groun Mount 0.1453 0.1321 10 000 kWp Ground Mount 0.1138 0.1034 The study recommends a feed-in tariff that is both location and size specific. The feed-in tariff depends on duration of the tariff with shorter periods resulting in higher feed-in tariff. A 20-year duration of the feed-in tariff is therefore recommended by this study. The method used in this study to determine the feed-in tariff included the impact of inflation in the analysis and therefore a fixed feed-in tariff (that is not indexed to inflation) is recommended. The energy regulator, and theministry responsible for energy policy setting can make use of this study in setting out feed-in tariff policy.