Grid parity analysis of distributed PV generation using Monte Carlo approach: The Brazilian case

We have conducted a grid parity analysis of distributed PV generation in Brazil through the use of a probabilistic Monte Carlo approach. Essentially, we have derived the probability distribution of the levelized cost of electricity (LCOE) for both PV and grid electricity. We have thus assessed how likely grid parity will occur with respect to system's nominal power and financing scheme in a net metering framework, by computing the cumulative probability for which the LCOE difference is nonnegative: P(ΔLCOE≥0). Regarding southern Brazil, it appears that economic viability of many residential grid-connected PV systems in operation is far from guaranteed, due to the need for substantial own capital and nominal capacity. 4-kW systems might be viable (P(ΔLCOE≥0)=0.82) but only by relying on equity financing, while small systems around 2kW will not (P(ΔLCOE≥0)≤0.3). When debt financing is considered however, merely systems with nominal capacity above 7kW present significant confidence levels (P(ΔLCOE≥0)>0.95). Eventually, it is outlined that electric company, state tax policy and consumption class are the effective leverages when assessing whether cost of distributed PV generation shall reach parity in the country.