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Photovoltaic (PV) penetration in the grid connected power system has been growing. Currently, PV electricity is usually directly sold back to the energy supplier at a fixed price nd subsidy. However, subsidies should always be a temporary policy, and will eventually be terminated. A question is raised whether grid-connected PV generation will be more beneficial by making biddings in power markets than by supplying at a fixed price. An economic model of profit maximization for PV generation when joining power markets is proposed to answer the question. A simplified model is applied to simulate a case study of PV biddings in the Amsterdam Power exchange (APX) spot market, using PV generation data from a standardized neighborhood PV installation. A Monte Carlo method is used to calculate penalty costs due to over-predicted irradiation. Also a Monte Carlo simulation is applied to survey a number of random imbalance capacities and corresponding prices within a Gaussian distribution by repeating the calculation loop. The sensitivity for prediction errors is examined by simulations with different unpredictability levels of solar irradiation. The outcome of the simulations is a value for the difference between the two revenues of PV generation when joining power markets and when supplying at a fixed price.
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Ho et al. (2009) studied this question.