Abstract
The appraisal of ground mounted photovoltaic systems is an important question, due to increasing investments in renewable energies. The costs related to installation and maintenance, and the economic benefits related to the energy saving, suggests the use of an income approach, in order to consider the financial aspects of the photovoltaic systems. This paper proposes the use of the Discounted Cash Flow Analysis (DCFA). The DCFA allows to simulate the entire life cycle of the photovoltaic system, from the acquisition date to the end of its life cycle, to evaluate the most probable market value by discounting the annual cash flows generated by the system. In particular, the paper proposes a procedure to determine the discount rate in an innovative manner through the combination of a conventional financial method (the Build up Approach) and the analytical method which makes recourse to the use of the ascending and descending influences that act, each with positive or negative sign, on the specific risk factors related to the photovoltaic investment. To obtain an objective appraisal of the discount rate, the theory of the ascending and descending influences has been applied in this specific case for the calculation of the risk premium. The percentage incidences of the ascending and descending influences, which influence the formation of the risks to which they refer, are determined through this study for all the intrinsic factors, which are part of the photovoltaic investment risks.
Highlights
Ground Mounted Photovoltaic SystemsThe increasing attention to environmental emergencies has produced substantial investments in the renewable energy sector and, in particular, in photovoltaic panels systems
The Discounted Cash Flow Analysis (DCFA) is a method which allows for the appraisal of the present value of the photovoltaic system, discounting to the valuation date of the appraised future cash flow through the discount rate
The risk context (Rcont ) is a risk linked to the geographical location of the photovoltaic system in the country and in relation to the presence of shaded areas caused by natural obstacles or inclination of the panels; the endogenous risk (Rend ) is a risk linked to the technical characteristics of the photovoltaic system, which influence the energy performance, and the purchase of electricity prices; the financial risk (Rfin ) is a risk linked to the specific investment; the risk system (Rsist ) is a risk that manifests itself in the national market level at which the system is inserted
Summary
The increasing attention to environmental emergencies has produced substantial investments in the renewable energy sector and, in particular, in photovoltaic panels systems. The ground mounted photovoltaic systems are constituted by the photovoltaic panels which are installed on metal structures raised from the ground, suitably dimensioned and anchored through a point system of steel poles These systems are connected to the grid, which facilitates the selling of all of the produced energy to the electricity companies. According to IEA appraisals, presented in the report Solar Photovoltaic Energy Roadmap 2015, in 2050, photovoltaic-produced energy could cover 16% of the world’s demand for electrical energy, with global installation, which could reach 4,600 GW and a production of about 6300 TWh per year. Build-up Approach, and the analytical method in which the rate is obtained from a market rate, to which the increases and decreases are added
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