Financial Analysis of Grid-tied Rooftop Solar Photovoltaic System employing Net-Metering

Abstract

Solar Photovoltaic is one of the most prominently used renewable and sustainable source of energy. There is an exponential rise in installation of Grid-tied Rooftop Solar Photovoltaic Systems in Residential, Institutional, Commercial and Industrial sectors. The main objective of this paper is to present a method for complete Financial Analysis of a 10 kW p Grid-tied Rooftop Solar Photovoltaic System employing Net- Metering scheme. The financial analysis is performed with present system cost based on Life Cycle Cost of Energy. Net Present Value (NPV), Return on Investment (ROI), Internal Rate of Return (IRR), Payback Period, Life Cycle Cost (LCC), Annualized Life Cycle Cost (ALCC), Cost per unit of electricity generated through installed photovoltaic system and estimating the amount of reduction in Carbon dioxide gas emission per year are the factors calculated for the financial analysis of the proposed system. The paper presents and compares the results of financial analysis of 10 kW p system using CAPEX model for Residential sector and RESCO model for Commercial sector. It is concluded that per unit cost of electricity generated through the present Grid-tied Rooftop Solar Photovoltaic System is cheaper than the present rate of electricity at which the Utility charges the residential and commercial customers. It is observed that the customers under both Residential and Commercial sectors do not need to pay any electricity bill to the Utility as the generation through the proposed system is excess than their needs and the excess energy is net-metered to the grid. The results for financial analysis of 10 kW p system have been validated with programs developed in Matlab.