Generating a framework to facilitate decision making in renewable energy investments

Abstract

The role of energy sector is quite crucial due to its economic, social, and political implications. World energy consumption has increased significantly with the growth of world population and gross domestic product throughout the history. There has been considerable increase in the renewable energy investments recently. However, conventional fossil fuels are still the primary source of energy generation of the world. The major objective of this study is to create a framework to support decision making process in renewable energy investments. For this purpose, main criteria that influence the decisions of the investors are determined based on an extensive literature survey and investigation of sector practice. The relevant criteria are categorized under three groups as technical, economic, and environmental & social. Then, interrelations between the criteria are identified and analytic network process method is applied to obtain the importance weights. Based on the findings of this research, economic criteria such as policies and regulations, availability of funds, and investment cost are found to be the most significant factors in the decision process of renewable energy investments. Research findings are expected to help (i) the investors assess the competencies of their investments and (ii) the governments shape their policies in line with the needs of renewable energy investments in order to increase the use of renewable energy.