The value of solar: Prices and output from distributed photovoltaic generation in South Australia

The Australian governmentʹs Solar Cities Program sees great value in so-called “cost-reflective pricing”, code for valuing solar at pool prices. We test that proposition in South Australia where pool prices and insolation are often high and we show that there were few days in 2004 when the pool price gives better outcomes than if the solar is valued at the regulated and fixed, so-called standing contract price. We also find that the illustrative day used in the Solar Cities Program literature to promote the notion of cost-reflective pricing is highly atypical. Finally, we consider ways in which the incentive to install distributed photovoltaic generation might be improved.