Countrywide Positioning of Domestic Solar Water Heating Systems using Risk Analysis and Geographical Information System

Abstract

In this paper, choosing appropriate locations for household solar water heating systems within a country is based on assessing project feasibility by using solar irradiation integrated in a geographical information system (GIS) and investment risk analysis, based on uncertainties in project input variables. Current indicators and statistics of solar systems of EU and Croatia are given, followed by impacting factors on investments in domestic SWH. Investment risks are determined. GIS is constructed to assess solar irradiation potential on a countrywide scale. A spreadsheet model for financial analysis using the Monte Carlo method for probabilistic simulation of uncertain project parameters is shown, which integrates GIS and determines a financial feasibility for two case studies. Financial indicators of net present value (NPV), internal rate of return (IRR) and simple payback time (SPB) are shown for three investment strategies, varying in financial resources according to profiled income categories of households in the country. A sensitivity analysis has been performed to determine the impact of individual risks on the financial outcome of the project. Financial flows are compared to determine the difference in feasibility for the same project on two different locations. Probability distributions for risks and financial indicators are shown.