The analysis above shows that climate change mitigation benefits
would not be sufficient to make solar energy technologies
economically attractive. However, solar energy technologies also
provide additional benefits, which are not normally excluded from
traditional economic analysis of projects. For example, as a distributed
energy resource available nearby load centers, solar energy
could reduce transmission and distribution (T&D) costs and also
line losses. Solar technologies like PV carry very short gestation
periods of development and, in this respect, can reduce the risk
valuation of their investment [29]. They could enhance the reliability
of electricity service when T&D congestion occurs at specific
locations and during specific times. By optimizing the location
of generating systems and their operation, distributed generation
resources such as solar can ease constraints on local transmission
and distribution systems [29,48]. They can also protect consumers
from power outages. For example, voltage surges of a mere millisecond
can cause ‘brownouts,’ causing potentially large losses to
consumers whose operations require high quality power supply.
They carry the potential to significantly reduce market uncertainty
accompanying bulk power generation. Because of their modular
nature and smaller scale (as opposed to bulk power generation),
they could reduce the risk of over shooting demand, longer construction
periods, and technological obsolescence [49]. Moreover,
the peak generation time of PV systems often closely matches peak
loads for a typical day so that investment in power generation,
transmission, and distribution may be delayed or eliminated [29]
However, developing a framework to quantify all these benefits is
beyond the scope of this study.