The recent change in the Italian policies for photovoltaics: Effects on the payback period and levelized cost of electricity of grid-connected photovoltaic systems installed in urban contexts

Abstract

This paper provides an economic analysis of the investment in grid-connected PV (photovoltaic) systems installed on the rooftops of buildings located in densely urbanised contexts. The analysis was applied to some case studies that were selected as representative of the latitudes of the southern, central and northern Italy. The returns of the investment in PV systems were investigated with the aim of comparing the impact of the current PV policy, based on the tax credit scheme, with the FIT (feed-in tariff) scheme, in force until July 2013. The cash flows related to the disbursements and benefits during the lifetime of the investment were computed for each combination of orientation, tilt, roof shape and number of householders in the buildings. The pay-back periods referred to the totality of the PV systems of each case study were estimated.The results showed that the implemented tax credit scheme produces more advantageous pay-back periods. The LCOE (levelized cost of electricity) was calculated as an indicator of the competitiveness of the PV technology. Although the tax credit scheme is more profitable than the FIT scheme, urban PV solar in Italy is still not competitive with conventional generation sources.