Promoting photovoltaic energy: a generation model for a capacity-constrained grid

This study optimizes the Inverter Loading Ratio (ILR) in large-scale photovoltaic (PV) installations to maximize investment profitability and mitigate grid saturation in capacity-constrained power grids. Different ILR values have been simulated for a PV installation located in Spain, using high resolution (1-minute) energy production data. Results indicate that an ILR of 1.43 optimizes financial returns on investment, achieving an Internal Rate of Return of 9.85 % and a Net Present Value-to-Investment Ratio of 25.5 %. Our sensitivity analyses show that the optimal ILR increases slightly with increasing energy prices (PPA) and significantly with decreasing PV module costs. Furthermore, our ILR optimization process, by increasing energy output without requiring additional grid connections, offers a valuable solution in regions with limited network capacity. Our findings highlight the economic and operational benefits of PV array oversizing.