Economic Evaluation of Smart PV Inverters with a Three-Operation-Phase Watt-Var Control Scheme for Enhancing PV Penetration in Distribution Systems in Taiwan

The paper presents an economic evaluation, including a cost-benefit analysis and a sensitivity analysis, of smart photovoltaic (PV) inverters with a novel Watt-Var control scheme for enhancing PV penetration in distribution systems in Taiwan. The novel Watt-Var control scheme with three operation phases is utilized to avoid the voltage violation problem during peak solar irradiation period and increase the PV real power injection, and thus can get higher PV penetration in distribution systems. To evaluate the benefit and cost of the PV investment project, the annual revenue of PV power sales, the initial capital investment cost for a PV project with or without a smart inverter, and the operating and maintenance (O&M) cost are taken into account. The paper demonstrates the analyses of net present value (NPV) and benefit-cost ratio (BCR) for the PV project. In addition, the paper also presents a sensitivity analysis to deal with the project uncertainty with respect to some affecting parameters. The analyzing results show that, under the feed-in tariffs (FITs) policy, with proper selection of PV and smart inverter capacities, the investment can be profitable, and the smart PV inverter can greatly enhance the PV penetration in distribution systems in Taiwan. These results can provide some useful information for making policy to encourage investment in solar PV industry.