Economic Analysis of PV Distributed Generation Investment Based on Optimum Capacity for Power Losses Reducing

Abstract

This paper presents an economic evaluation to choose the most benefecial investment of photovoltaic (PV) distributed generation based on technical calculation of optimum PV location and capacity to reduce power losses. Input of economical evaluation is using the output calculation of technical analyses which has been calculate in previous study. The technical evaluation calculate the optimal PV location to reduce feeder power loss by using sample of 7 type of radial distribution, 5 feedersfrom Indonesia State Electricity Company (PLN) and 2 from IEEE, which calculated by DIgSILENT 14.1. The optimal location that has been calculated is used as a based location to find out the optimum PV capacity to be installed by using some economical parameter. The annual savings from feeder loss reduction, the annual revenue of PV power sales, the initial capital investment cost for a PV and the operating and maintenance (O&M) cost are then taken into account to evaluate the benefit and cost of the PV investment to covers analyses of net present value (NPV), Internal rate of return (IRR), and payback period (PP). All of economic methods calculation is compared to get the most beneficial investment. Based on calculation, with proper selection of PV and capacities, the investment can be profitable by choosing NPV based-decision. Mathematical equation characteristic of the results by these indicators is also presented.