Assessment of Economic Synergies of Agrivoltaics in the Distributed Generation Segment in Chile

Techno-Economic Analysis and Policy Recommendation

Abstract

Agrivoltaics (AV) combines photovoltaic (PV) electricity generation with agriculture on the same land. In Chile, despite high potential, AV is not yet commercialized due to high investment cost. To close the remaining cost gap to conventional PV, we shed light on a set of AV specific synergies in the market segment of Small Distributed Generation Facilities. Through a techno-economic model, this paper monetizes AV synergies to derive the economic performance of a sun tracked AV system over blueberries for the PV stakeholder. The study reveals that tracked AV systems can be operated with an Internal Rate of Return (IRR) of 5.2% at the threshold of profitability. This is enabled due to the exploitation of synergies within the market segment that improve IRR for the PV stakeholder by 2.5%. Still, sun-tracked AV requires compulsory technology grants between 5 – 10 USD/MWh to be economically implemented. The results indicate the necessity for regulative adaption. Legislation must open agricultural land for AV project development to enable the commercialization.