Geographic maps of the impact of government incentives on the economic viability of solar power

Abstract

Abstract This paper presents geographic maps of the profitability of PV and CPV solar projects over 1,960,000 km2. Such maps supplement the irradiance maps used in solar project planning and are relevant to government policy makers to assess the impact of incentives on profitability. Also, they are useful to solar project developers to identify geographical areas in which a required rate of financial return can be expected. Eight such maps of central Canada are presented in this paper and show the impact on profitability of different levels of government incentives, the difference in profitability between PV and CPV and the impact on profitability of delaying a project start date from 2016 to 2020. Government incentives of 10%–30% of the capital cost improve the internal rate of return (IRR) by between 0.7 and 4.67. For PV, the orientation of the modules is optimized to achieve maximum IRR resulting in an IRR increase of between 1.3% and 8.2%. Since CPV is a more recent technology than PV, its capital costs are projected to decline faster and we quantify the impact on IRR by showing that CPV has a higher IRR than PV of between 0.55 in 2016 and 3.6 in 2020.