Assessing LCOE of rooftop PV in the Baltics
Researchers from Riga Technical University and Czech Technical University in Prague have explored the economic feasibility of rooftop solar systems in multi-apartment buildings across Estonia, Latvia and Lithuania.
The research paper “Estimation of LCOE for PV electricity production in the Baltic States – Latvia, Lithuania and Estonia until 2050,” available in the journal Renewable and Sustainable Energy Transition, used stochastic modeling and Monte Carlo simulations to calculate the levelized cost of electricity (LCOE) for the rooftop solar sector across the region.
The LCOE forecasts incorporated capital expenditures (Capex), operating expenses (Opex), discount rates and energy yield projections, with a sensitivity analysis highlighting Capex as the dominant factor influencing LCOE outcomes. The researchers say the Capex influence underscores the importance of analyzing both the costs of the system itself and the installation expenses.
The researchers calculated the median LCOE at a 6% discount rate of €0.08 ($0.087)/kWh in Latvia and Lithuania and €0.09/kWh in Estonia. The LCOE across all regions ranged from €0.05/kWh to €0.12/kWh at a 6% discount rate. The researchers say these results show rooftop systems are economically viable in each of the countries.
The paper's conclusion highlights extreme scenarios that show significant fluctuations in LCOE, from negative values up to €0.63/kWh at an 8% discount rate in Estonia. The researchers go on to emphasize that a negative LCOE for solar is not possible in reality and add that extreme cases are highly unlikely to occur.
The Baltic region's solar potential totals around 40 GW and is projected to draw €150 billion in investment opportunities by 2050, the research paper adds. To date, the deployment of rooftop solar across the Baltics has been driven by government incentives including subsidies and net metering, bolstered by EU funding.
The researchers say the Baltics have seen a significant surge in solar energy in recent years as the region works to reduce its longstanding energy dependence on Russia. In February this year, the three countries disconnected from the BRELL electricity supply loop with Belarus and Russia, before connecting to the European continental electricity system, which the researchers explain has helped to increase energy security and reduce dependence on Russian energy resources.
However, the academics go on to add that gaps in collective self-consumption frameworks and energy community policies in the Baltics persist. A comparative analysis with other EU regions highlights that stronger policy interventions are needed to accelerate solar adoption in multi-apartment buildings.
“By addressing regulatory, economic, and technical barriers, policymakers can create an enabling environment for decentralized energy production,” they concluded.