Feasibility evaluation of residential photovoltaic self-consumption projects in Peru

Abstract The promotion of large photovoltaics projects is a trendy reality in South America, but the potential to be a solution for distributed generation through small-medium systems connected to the grid is an under-exploited reality. In this paper, a techno-economic analysis of three small PV systems located in different cities of Peru is undertaken. Based on real measured energy data, two different scenarios are going to be economically evaluated: one that resembles a lease contract and another in which a residential owner promotes its installation. Levelised Cost of Electricity results vary from 0.10 USD/kWh to 0.20 USD/kWh, showing that only in the city of Arequipa a cost-competitive result is achieved, whereas in Tacna and Lima it depends on the financing mechanism chosen. Underline that in the city of Lima grid-parity may not be achieved until 2027. In addition, companies selling PV energy within the homeowner facilities, despite resulting in LCOE values lower than the electricity tariffs, they may face non-profitable situations. Therefore, only if banks incorporate the financing of small-scale grid-connected photovoltaic projects into their product portfolio and there is a government policy to promote this technology, small PV projects may be a feasible solution for all residential users in Peru.