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Solar hybrid power systems are hybrid power systems that combine solar power from a photovoltaic system with another power generating energy source. A common type is a photovoltaic diesel hybrid system, combining photovoltaics (PV) and diesel generators, or diesel gensets, as PV has hardly any marginal cost and is treated with priority on the grid. The diesel gensets are used to constantly fill in the gap between the present load and the actual generated power by the PV system.
As solar energy is fluctuating, and the generation capacity of the diesel genesets is limited to a certain range, it is often a viable option to include battery storage in order to optimize solar's contribution to the overall generation of the hybrid system.
The best business cases for diesel reduction with solar and wind energy can normally be found in remote locations because these sites are often not connected to the grid and transport of diesel over long distances is expensive. Many of these applications can be found in the mining sector and on islands
In 2015, a case-study conducted in seven countries concluded that in all cases generating costs can be reduced by hybridising mini-grids and isolated grids. However, financing costs for diesel-powered electricity grids with solar photovoltaics are crucial and largely depend on the ownership structure of the power plant. While cost reductions for state-owned utilities can be significant, the study also identified short-term economic benefits to be insignificant or even negative for non-public utilities, such as independent power producers, given historical costs at the time of the study.
Other solar hybrids include solar-wind systems. The combination of wind and solar has the advantage that the two sources complement each other because the peak operating times for each system occur at different times of the day and year. The power generation of such a hybrid system is more constant and fluctuates less than each of the two component subsystems.