Economic analysis of photovoltaic/thermal systems with forced circulation under optimal switching control

Abstract

In this paper, an economic feasibility study is performed to evaluate the cost effectiveness of the optimal switching control model of flow in a 250 W PV/T system with forced water circulation by comparing it with a standard 250 W PV system without cooling, known as the baseline. There are economic performance indicators, such as simple payback period (SPP), internal rate of return (IRR), benefits-to-cost ratio (BCR), and lifecycle cost (LCC). The SPP method is easy to understand and to calculate. However, it doesn't factor in that money depreciates over time due to inflation and other factors. Also, the project lifetime is not taken into account with this method, where the investors will not be fully aware of the profitability of the project. Therefore, a True Payback period analysis based on a 30-year project lifetime is performed to calculate when each system will be paid back and thereafter generate profit. The analysis showed that the total capital cost of the standard PV system will be recovered after 10 years, which provides the investor 20 years to generate profit from their investment. However, the analysis showed it takes 14 years to regain the total capital investment for the optimal switching control strategy. The initial capital cost of the optimal switching control strategy is higher by a factor of 3 compared to the standard PV system, which seems repulsive to invest in the optimal switching control strategy. Nevertheless, when observing both these systems over their predicted lifetime, the optimal switching control strategy generates a much higher profit, regardless of its extortionate initial capital cost, and is therefore, the most efficient system.