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10.6.2 Capacity credit
The assigned capacity credit is based on the statistical probability with which the grid
can meet demand.
There is a certain probability that the PV plant will not be available during periods of
peak demand (due mainly to lack of sunshine), just as there is for conventional
electricity generating plant (because of forced outages or outages for maintenance). In
the Carissa Plains example cited later, the capacity factor during peaks is very similar
to that of conventional equipment, so similar capacity credit could be given.
In NSW at present, a PV plant would generate little electricity during winter evening
peaks, so little capacity credit could be given over winter, unless dedicated storage
were included. However, even though a grid overall may be ‘winter peaking’,
subsections may be ‘summer peaking’, increasing the value of a PV plant, if suitably
located. In addition, the electricity loads in most Australian States are graduating
towards being ‘summer peaking’, while commercial demand, which is increasing
rapidly, tends to peak over the middle of the day and is well matched to PV output.

10.6.3 Distributed benefits
Owing to the modularity of PV systems, they need not be centralised within the grid
but can be distributed throughout it, as is the case for most of the small systems
discussed earlier, which are installed on buildings. Apart from energy and capacity
benefits, this can also give substantial ‘distributed benefits’, such as delaying the need
for transformer, conductor or circuit upgrading, reducing transmission, distribution
and transformer losses, increasing reliability and providing kVAR support in some
specialised cases (Rannels, 1991; Wenger et al., 1994). Such distributed benefits can
double the value of the PV generated energy, compared to assessments based only on
energy and capacity credits (Bigger et al., 1991; Wenger et al., 1994). A study in
Arizona (Solar Flare, 1993) calculated total benefits of US$700/kW/year for a PV
system at a suitable site. Depending on the value attributed to externalities, the break-
even cost for the installed PV systems discussed in the above reference varied from
US$2.36/W p , with no distributed benefits, to US$3.96/W p using the externality values
set for the state of Nevada. Analysis of a Californian case (Wenger et al., 1994)
estimated a total value of US$293–424/kW/year.

A situation where PV could contribute distributed benefits is that of imminent thermal
overload. A distribution transformer or line to a particular region of the grid may be
approaching thermal overload as the demand at the end of the line grows, say on
summer days. Normally, an extra line would be added or the infrastructure upgraded,
at considerable capital expense. Alternatively, photovoltaics could be added to the
distribution line, as illustrated in Fig. 10.9.

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