This thesis provides a cost to benefit analysis of the proposed next generation of distribution systems- the Future Renewable Electric Energy Distribution Management (FREEDM) system. With the increasing penetration of renewable energy sources onto the grid, it becomes necessary to have an infrastructure that allows for easy integration of these resources coupled with features like enhanced reliability of the system and fast pro-tection from faults. The Solid State Transformer (SST) and the Fault Isolation Device (FID) make for the core of the FREEDM system and have huge investment costs.

Some key features of the FREEDM system include improved power flow control, compact design and unity power factor operation. Customers may observe a reduction in the electricity bill by a certain fraction for using renewable sources of generation. There is also a possibility of huge subsidies given to encourage use of renewable energy. This thesis is an attempt to quantify the benefits offered by the FREEDM system in monetary terms and to calculate the time in years required to gain a return on investments made. The elevated cost of FIDs needs to be justified by the advantages they offer. The result of different rates of interest and how they influence the payback period is also studied. The payback periods calculated are observed for viability. A comparison is made between the active power losses on a certain distribution feeder that makes use of distribution level magnetic transformers versus one that makes use of SSTs. The reduction in the annual active power losses in the case of the feeder using SSTs is translated onto annual savings in terms of cost when compared to the conventional case with magnetic transformers. Since the FREEDM system encourages operation at unity power factor, the need for installing capacitor banks for improving the power factor is eliminated and this re-flects in savings in terms of cost. The FREEDM system offers enhanced reliability when compared to a conventional system. The payback periods observed support the concept of introducing the FREEDM system.