# Cost-Benefit Analysis of Small-Scale Rooftop PV Systems: The Case of Dragotin, Croatia
## 1 Introduction
It can also be said that self-consumption of photovoltaic (PV) energy is an economic model in which the building uses the produced PV electricity for its own needs, acting at the same time as a producer and a consumer, or as a \"prosumer\". The neologism \"prosumer\" refers to a user of electricity who produces electricity to support his own consumption (and perhaps to inject into the grid). The word was built on the association of \"producer\" and \"consumer\" and is widely used today. Two ratios are important for own consumption: self-consumption (\(SC\)) and self-sufficiency (\(SS\)). \(SC\) is defined as the amount of locally produced and consumed electricity (\(E_{\text{lgc}}\)) with respect to total local electricity production (\(E_{\text{gen}}\)) [4]:  
\[SC_{x}=\frac{E_{\text{lgc,x}}}{E_{\text{gen,x}}}, \tag{1}\]  
where x is the reference time interval for which the ratio is calculated. The interval can be one day, month, or year. \(SS\) is the amount of consumption delivered by local production (\(E_{\text{lgc}}\)), given the total consumption (\(E_{\text{load}}\)). Thus, it quantifies the independence of users from the grid [4] and is calculated according to:  
\[SS_{\text{x}}=\frac{E_{\text{lgc,x}}}{E_{\text{load,x}}}, \tag{2}\]In practice, \(SC\) and \(SS\) can be from a few percent to theoretically 100%, depending on the capacity of the photovoltaic system and the user load profile. The question of the ratio of own consumption is deeply connected with the question of whether to invest in the installation of a roof PV system or not. The higher the \(SC\), the higher the profitability of the whole system, since the retail prices of electricity are significantly higher than the purchase prices of electricity. However, in the household sector, the amount of PV energy produced and the amount of consumption in certain time intervals rarely coincide, which implies that only a limited part of PV-produced electricity can be used for own consumption. For example, [PERSON] et al. [5] state that the average share of direct own consumption is about 30%. In this context, battery-powered energy storage systems allow for increases in \(SC\) levels by storing excess solar energy produced that will be used later (i.e., indirect own consumption). [PERSON] et al. also state that it is possible to increase your own consumption between 13% and 24% by using a battery system with a capacity of 0.5-1 kWh per installed kW PV system. Own consumption of PV electricity assumes that the costs of photovoltaic electricity production are lower (at the time of capital investment or during the lifetime of the rooftop PV plant) than the cost that the consumer pays for electricity from the grid. Without reaching this threshold, own consumption requires state support. The indication that grid parity has been achieved could mean that the production of electricity, rather than its purchase from the grid, is profitable. This is not the case for several reasons, which will be explained below. It can be said that network parity is a milestone but not a guarantee of the competitiveness of roof PV systems. Grid parity is actually the moment when the levelized cost of energy (LCOE) becomes lower than the retail price of electricity. If certain grid costs and fees cannot be compensated (for example, due to a higher fixed part of the grid excise duty), grid parity is not achieved when the price of electricity from PV becomes lower than the retail price of electricity from the grid. PV electricity prices need to be further reduced to reach this first measure of competitiveness. Moreover, since part of the produced PV electricity is exported to the grid and valued at a lower price than the retail price, PV LCOE must be further reduced to ensure the competitiveness of PV electricity. Most of the studies conducted were driven by promises of solar PV grid parity [6] and declining battery storage prices [7].