Renewable energy production support schemes for residential-scale solar photovoltaic systems in Nordic conditions

The objective of this study was to examine the effect of production-based support schemes on the economic feasibility of residential-scale PV systems (1–10 kW) in Finland. This was done by calculating the payback time for various sizes of newly installed PV systems for a Finnish detached house with district heating. Three types of economic support schemes (guaranteed selling price, fixed premiums and self-consumption incentives) were tested in an hourly simulation. The load of the building was based on real-life measurements, while PV output was simulated with TRNSYS software. The energy results were post-processed with economic data in MATLAB to find the payback time. Hourly electricity prices from the Nordic energy market were used with PV system prices from Finnish companies. Unsubsidised residential PV systems in Finland had payback times of more than 40 years. The production-based support for PV generation needs to be two to three times the buying price of electricity, to make it possible to pay back the initial investment in 20 years. Low capacity systems with more than 50% self-consumption (under 3 kW) were favoured by self-consumption incentives, while high capacity systems with less than 40% self-consumption (over 5 kW) were favoured by the FIT-type support schemes. - Highlights: • Unsubsidised residential PV is uneconomical in Finland. • Support rate must be 2 times the electricity price for reasonable payback time. • Even using all electricity on-site is not profitable enough without support. • Assumed real interest rate had great influence on payback time. • Hourly electricity prices are much lower than average values from Finnish statistics