Economic Analysis of Renewable Energy Generation from a Multi-Energy Installation in a Single-Family House

Abstract

The promotion of Renewable Energy Sources RES installations in single-family houses is an element of the broadly understood decarbonisation strategy. Investments in photovoltaic installations and pellet boilers have a direct effect on decreasing CO2 emissions, thereby contributing to the improvement in air quality and mitigation of climate change, but the question remains of whether they are economically viable. High energy consumption by households results in a significant burden on their budgets. The purpose of this study was to conduct an economic analysis of the renewable electricity (photovoltaic microinstallation—PV) and heat (a pellet boiler) produced in three consecutive years by a single family situated in North-Eastern Poland. The economic analysis was based on the determination of the electricity and heat production costs for renewable energy sources and selected fossil fuels. Profitability metrics such as net present value, internal rate of return and discounted payback period were used for the assessment. For the comparison of electricity costs, the costs of electricity from the power grid were confronted with the costs of electricity generation from a PV microinstallation. For the comparison of heat production costs, the following scenarios were analysed: (i) eco-pea coal vs. pellet, (ii) natural gas vs. pellet and (iii) heating oil vs. pellet. Next, comparisons were made and analysed for multi-energy systems. When comparing the PV microinstallation investment with the variant of using electricity from the power grid, a positive NPV equal to EUR 5959 was obtained for the former, which proved it was profitable. Among the heat generation variants, the lowest total costs were related to eco-pea coal (EUR 29,527), followed by pellet (EUR 33,151) and then natural gas (EUR 39,802), while the highest costs of heat generation were attributed to burning heating oil (EUR 63,445), being nearly twice as high as the cost of burning pellets. This analysis of multi-energy systems showed that the RES system composed of a PV microinstallation for electricity production and a pellet-fired boiler for heat generation was most advantageous because it yielded the lowest total costs (EUR 41,265) among all the analysed variants. A properly selected PV microinstallation and an automatic pellet-fired boiler can make a single-family house economical and provide it with sufficient amounts of renewable electric and heat power throughout the year.