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A hybrid system combines PV with other forms of generation, usually a diesel generator. Biogas is also used. The other form of generation may be a type able to modulate power output as a function of demand. However more than one renewable form of energy may be used e.g. wind. The photovoltaic power generation serves to reduce the consumption of non renewable fuel. Hybrid systems are most often found on islands. Pellworm island in Germany and Kythnos island in Greece are notable examples (both are combined with wind). The Kythnos plant has reduced diesel consumption by 11.2%.
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 such hybrids 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 economic benefits to be insignificant or even negative for non-public utilities, such as independent power producers.
