Distribution company investment cost reduction analysis with grid-connected solar PV allocation in power distribution system

Currently, the solar PV is an important renewable energy because of an advantage for environment including the power distribution systems. Optimal sizing and placement of grid-connected solar photovoltaic (PV) are important for power loss reduction in distribution system because it also leads to the cost reduction. To promote the solar PV energy, feed-in tariff (FiT) policy was used in many countries. However, due to the FiT still higher than normal wholesale, the distribution company (DisCo) can absorb and leads to increase electricity retail price in the future. Therefore, the DisCo investment cost related to the power loss reduction was analyzed in this work by considering sizing and placement of grid-connected solar PV on the IEEE 33 bus and IEEE 69 bus distribution systems. To explore optimal solar PV placement, profit-cost ratio (PCR) was estimated with parameters of the reduced cost due to reduction of power loss and the DisCo investment to absorb FiT cost. The results show the DisCo cost depending on the solar PV sizing and the reduced cost due to installation of solar PV placement in power distribution system. Although the maximum power loss reduction is an optimal location, the maximum reduction of the DisCo absorbing FiT cost was achieved at the maximum PCR location. Thus, the optimal placement relating to the PCR is an important to explore the solar PV allocation in distribution system.