Pricing the urban cooling benefits of solar panel deployment in Sydney, Australia

Cities import energy, which in combination with their typically high solar absorption and low moisture availability generates the urban heat island effect (UHI). The UHI, combined with human-induced warming, makes our densely populated cities particularly vulnerable to climate change. We examine the utility of solar photovoltaic (PV) system deployment on urban rooftops to reduce the UHI, and we price one potential value of this impact. The installation of PV systems over Sydney, Australia reduces summer maximum temperatures by up to 1 °C because the need to import energy is offset by local generation. This offset has a direct environmental benefit, cooling local maximum temperatures, but also a direct economic value in the energy generated. The indirect benefit associated with the temperature changes is between net AUD$230,000 and $3,380,000 depending on the intensity of PV systems deployment. Therefore, even very large PV installations will not offset global warming, but could generate enough energy to negate the need to import energy, and thereby reduce air temperatures. The energy produced, and the benefits of cooling beyond local PV installation sites, would reduce the vulnerability of urban populations and infrastructure to temperature extremes.