The potential market for photovoltaics and other distributed resources in rural electric cooperatives

In the United States, rural electric cooperatives have an aging distributio n system (1 million miles of distribution wires were originally installed o ver 40 years ago) and a load density that is about one-tenth of the load de nsity at other utilities. The result is that there may soon be a large mark et opportunity for photovoltaics (PV) and other distributed resources. This paper calculates the cost of replacing portions of the distribution system as it wears out with hybrid-PV systems, compares it to the cost of replaci ng the system with equivalent distribution system equipment, and selects th e alternative with the lowest cost. Results suggest that there is a potenti al market of 500 MW to 950 MW of PV at a price of $3,000/kW (a 50 percent r eduction over PV prices in 2000) and a corresponding fossil-based generatio n market size of 280 MW to 555 MW at a price of $1,000/kW. The hybrid-PV sy stems could replace 7 percent to 16 percent of the miles of distribution sy stem and could save co-ops $1.0 billion to $2.5 billion (present value).