Photovoltaic Investment Research Articles

The Role and Impact of Rooftop Photovoltaics in the Norwegian Energy System under Different Energy Transition Pathways

This study focuses on investigating the impact and cost‐competitiveness of solar power in a highly hydropower‐driven northern energy system. The goal is to assess the role of rooftop photovoltaics (PV) in the Norwegian energy system toward 2050 under different energy transition pathways. Energy system analysis is conducted using the IFE‐TIMES‐Norway model, with an integrated detailed representation of rooftop PV based on the tilt and azimuth of existing rooftops in Norway. A thorough sensitivity analysis is conducted to illustrate how investment in rooftop PV varies under different system and parameter conditions and to disclose important barriers for PV in similar energy systems. The results show that when PV investments are facilitated, solar power can potentially stand for 56% of all new investments, resulting in a share of 10% of the total electricity generation. With less competition from onshore wind power and favorable investment parameters, especially lowering the demand for the rate of return, the investments in PV will be four times higher and reach their full potential in commercial and apartment buildings by 2050. Additionally, the results highlight that the cost parameter functions as a barrier to other solutions that facilitate increased PV investments, such as flexibility and energy storage.

Using DNPV to determine the economic viability of residential photovoltaic systems in Germany: Is the investment still worth it?

The conditions for photovoltaic investments have changed significantly in recent times. Declining subsidies and rising investment costs make these investments less attractive. In addition, electricity price uncertainty has risen sharply, making the economic benefit of using self-produced electricity from residential photovoltaic systems risky. This paper provides a novel framework to determine the financial attractiveness of such investments using the Decoupled Net Present Value (DNPV) method, which allows for a systematic and consistent consideration of the individual risks inherent in these investments. Furthermore, an extensive survey of the relevant current market parameters is performed to validate the common opinion that residential photovoltaic investments are generally advantageous. It turns out that in the current market environment in Germany, residential photovoltaic systems are not economically viable under most conditions. The system evaluated in this case study with a common size of 10 kWp leads to a negative DNPV of -1,664 €. This results in a compelling need for action for political decision-makers in order not to jeopardize the ambitious goals for the expansion of power generation from renewable energy sources.

Photovoltaic sizing assessment for microgrid communities under load shifting constraints and endogenous electricity prices: A Stackelberg approach

Renewable energy resources are crucial for decarbonizing the energy sector. Distributed energy resources, such as renewable generation by microgrids, aid the transition to net-zero systems. As microgrids proliferate, renewable generation often exceeds self-supply capacities, necessitating either the sale of excess electricity or the implementation of demand-response strategies. The optimal approach for microgrids (selling or shifting demand) hinges on electricity prices. This article examines the interplay between microgrids, demand response, photovoltaic investments, and pricing mechanisms. A novel Stackelberg model is proposed to minimize microgrid investment and operational costs. The upper-level problem determines energy community investments and demand response levels based on electricity prices, while the lower-level problem addresses market dispatch and endogenous pricing for microgrids. Case studies with varying battery storage levels, demand response limits, and pricing mechanisms are conducted. The research results illustrate the responsiveness of market transactions to supply conditions and pricing. Key findings show that microgrid flexibility in demand response reduces grid dependency, prompting significant investments in solar energy and battery storage, driven by economic incentives, especially under spot market conditions. Investments in solar energy more than double when microgrids trade energy at spot prices compared to flat prices.

From roofs to renewables: Deep learning and geographic information systems insights into a comprehensive urban solar photovoltaic assessment for Stonehaven

As urban solar photovoltaic (PV) construction emerges as a leading renewable energy technology, there is a growing focus on its implementation. However, the challenges of scarce, low-resolution, and inaccurate PV-related data sources hinder accurate assessments of urban PV potentials and are not conducive to efficient and rational smart city planning. This study tackles these challenges by introducing a mature, detailed, and accurate assessment process, taking Stonehaven as an example, aimed at leveraging limited data to mine more data and geographic information useful for guiding urban PV planning. Initially, utilise existing Digital Surface Model (DSM) and optical image data, combined with deep learning techniques and a PV potential assessment model, to comprehensively assess the PV power generation potential of the Stonehaven area. Our results demonstrate that integrating DSM significantly enhances the accuracy of roof segmentation. Furthermore, compared with DeeplabV3, U-Net performs better in roof segmentation. Additionally, the solar radiation potential (SRP) map generated by DSM highlights the superior solar radiation receiving capacity of south-facing and flat roofs. We provide a detailed PV power generation potential (PPGP) map of individual building roofs, revealing the substantial potential of this area for generating up to 1.12 × 10^7 kWh of electricity per year. Detailed and fine-grained PPGP can also help to optimise PV siting and electricity resource allocation. Furthermore, our return-on-investment period (ROIP) analysis indicates that most Stonehaven roofs have ROIPs between 8.1 and 11.3 years. The detailed ROIP distribution map can help people make informed PV investment decisions. Future research directions include enhancing data quality, refining segmentation algorithms, and exploring assisted urban energy planning analysis for smarter urban planning.

Fundamental Barriers to Green Energy Production in Selected EU Countries

Most EU countries are trying to develop new sources of energy to meet local power requirements due to energy shortages. The most popular renewable energy developments include biogas stations, wind turbines, water turbines, and solar systems. This article focuses on reviewing studies concerning the utilization of solar energy systems, especially photovoltaic (PV) ones, in European countries such as Germany, Italy, Spain, and Poland, which are leaders in PV installations. The review identifies factors influencing the development of PV investments and the energy situation in these countries. Economic, market, environmental, and infrastructural barriers, as well as driving factors, are presented. In all countries, the majority of installations were in the prosumer sector, with only a very small percentage in the state-owned sector. The methodology of the study covered the mentioned barriers, which were identified using scientific databases such as Scopus, Web of Science, and branch organizations websites like the International Renewable Energy Agency (IRENA). The novelty of the article lies in its examination of special barriers concerning green energy production in chosen EU countries. Normally, when reading articles on PV installations, as presented in the References section, one primarily observes a description of the construction process without deep involvement in the presented ideas.

The effect of PV generation's hourly variations on Israel's solar investment

Limited by sunniness and conversion efficiency, one installed MW of photovoltaic (PV) capacity can only produce ωt MWh of electricity in daytime hour t, where ωt = positive fraction that we call PV's hourly effective capacity (HEC). Based on a sample of commercially operating PV plants in Israel, HEC rises throughout the 08:00–11:00 period, peaks in the 11:00–14:00 period and then declines in the 14:00–18:00 period. Further, HEC values in spring and summer exceed those in autumn and winter, thus motivating our research question: do HEC variations by hour and season adversely affect the plans for and assessment of PV investment in Israel? An affirmative answer would cause concerns regarding Israel's announced policy of relying on increasing market penetration of PV generation transitionally supported by merchant natural-gas-fired generation (NG) to achieve a low-carbon electricity future. Hence, we propose a two-stage model of Israel's forthcoming Cournot wholesale electricity market with independent power producers (IPPs) operating PV and NG power plants. By comparing the model's solutions under alternative HEC scenarios, we find that the level of detail in modelling the HEC variations by hour and season does not materially affect the optimal PV and NG investments, thus lending support to the use of relatively simple models with only two daily non-seasonal HEC values to assess Israel's announced policy of deep decarbonization. Our methodology is general and real-world relevant because it can be readily adapted for applications in other regions with ample sunshine and wholesale electricity market competition (e.g., California, Texas and Australia).

Impact of the net-metering policies on solar photovoltaic investments for residential scale: A case study in Brazil

The adoption of renewable energy resources is in the core of energy transition. However, its implementation can be highly impacted by country policies. A limited number of researches investigated solar photovoltaic investments, comparing net-metering rules for distinctive energy consumption levels and different discounted rates, from the investors’ point of view. This paper analyzes the impact of Brazilian net-metering rules on solar photovoltaic investments, considering residential scale. The methodology contemplates the development of a Discounted Cash Flow model to calculate Discounted Payback (DP), Net Present Value (NPV), Internal Rate of Return (IRR), and Levelized Cost of Electricity (LCOE) of projects. The case studies consider the impact of Brazilian regulation from net-metering rules (previous, considered, and current), energy consumption levels (Low, Middle, and High), and discount rates (5 %, 10 %, 15 %, and 20 %). The results show that from the previous to current rule the return for investor, on average, decreased 5.77 %. However, this reduction would be of 12.81 % if considered rule was adopted. For the 36 studies carried out, even in the worst case the investments remain viable. Therefore, the existing policy is suitable for the current stage of sector development; minimizing the impacts for energy tariff, distribution companies, consumers, and prosumers.

Renewable Energy Investments in Poland: Goals, Socio-Economic Benefits, and Development Directions

Renewable energy sources (RES) will play a key role in the transition to clean energy. Financial and socio-economic benefits determine the investment management in these energy sources. This article aims to indicate current energy policy goals, present socio-economic benefits resulting from renewable energy investments, and review further development directions in Poland. The research was carried out using desk research, case studies, and literature review methods to provide a broader economic context for RES investments. The scope of the research included both the Polish and the European Union contexts. The authors examined the Polish objectives of investment in renewable energy contained in strategic, planning, and other legal documents compared to EU targets, reviewed possible investments in renewable energy, and indicated wind farms and photovoltaic investments as the most effective ones from the point of view of further development which aims to meet the EU’s goals by 2030. The authors also demonstrated a wide range of socio-economic benefits based on literature reviews, analysis of policy documents, and regulations regarding the energy sector, and examined a specific example of investment implementation and identified the ecosystem of beneficiaries and their benefits.

The impact of solar PV subsidies on investment over time - the case of Sweden

Over the past decade, different economic incentives have been created to increase investments in solar photovoltaics (PV). Although research outlines that investors in renewable electricity technologies (RET) are heterogeneous, policies have not taken this into account when designing subsidy programs. This paper aims to analyse the relationship between policy incentives and the willingness to invest in PV systems for different investor groups, including households, companies, associations, and public organizations. Using data from all applications to the capital subsidy program for PV in Sweden between 2009 and 2021, we analyse the impact of the subsidy level on investments over time. Our analysis shows that the subsidy has had a positively significant impact for households and private companies as investor groups. However, we also found that other variables have had a significantly positive or negative effect on the willingness to invest for different investor groups. This stresses the need of going from “one size fits all” policies to policies that better adapted to different investor characteristics. To meet the urgent need to accelerate the diffusion of RETs, our results show the impact of investor heterogeneity on policy responsiveness and provide avenues for the design of targeted policies.

Price-Responsive Prosumers in Transmission-Constrained Power Markets: Pricing, Investment, and Social Welfare

The emergence of prosumers with renewable distributed energy resources has led to a paradigm shift in the electricity market. We formulate a complementarity problem to analyze a transmission-constrained power market in the presence of price-responsive prosumers who invest in photovoltaics (PVs) coupled with battery storage under two pricing schemes: net metering and net billing. Our study has three main findings. First, both investments in PVs and transmission tariffs are greater under net metering than under net billing over the range of PV capital costs. Second, the prosumer investments in PVs increase when coupled with battery systems under both pricing schemes. Third, the total social surplus under net billing tends to be larger than that under net metering. Moreover, the gap in the total social surplus between the pricing schemes widens when battery capacities are larger. Overall, we find that net billing could be a more efficient regulatory scheme, possibly avoiding over-investment in PVs.

How to use BAPV to alleviate the urban heat island effect: An evolutionary game perspective.

In recent years, the phenomenon of the urban heat island caused by the rapid development of cities is very serious. To solve the problem of the urban heat island, this study proposed a PPP project consisting of the government (GOVT), photovoltaic investment company (PVIC), and residential customers (RS). Based on an evolutionary game model and combined with current policies and industry regulations in China, the evolution process and stable evolution strategies were studied. The result shows that more government subsidies, higher carbon trading prices, and feed-in tariffs will promote the development of the PPP project. For relatively suitable reference value ranges, the installation tilt angle of the BAPV system is 30°, the photovoltaic grid electricity price is 0.1096∼0.1296 $/kWh, the carbon trading is 8.92∼9.42 $/t.

Comparative analysis of the profitability of private investors and enterprises in the photovoltaic investment in the light of the amended RES Act in Poland

Comparative analysis of the profitability of private investors and enterprises in the photovoltaic investment in the light of the amended RES Act in Poland

Techno-economic assessment of residential and farm-based photovoltaic systems

The present study aims to provide a techno-economic analysis of two commonly used photovoltaic (PV) systems, Residential PV (RPV), and Farm-based PV systems (FPV) in Ogan Komering Ulu (OKU), South Sumatra, Indonesia. The study includes calculating the potential power output using simulation by the PVsyst program, the economic calculations, and the sensitivity test. The result showed that the average Global Horizontal Irradiance (GHI) was 4.8 kWh/m2 and fluctuated depending on the location and seasons. The economic analysis found that both photovoltaic systems were profitable investments and less risky projects. Further economic analysis confirmed that the different size of PV system has no competitiveness in economic profitability, but the Payment Back Period (PBP) depends on the annual profit and investment size. The sensitivity analysis found that the selling depreciation has the greatest impact on the viability of PV investment, while Operation and Maintenance (O&M) fluctuation has no significant effects. These findings provide an overview of how investing in PV technologies in Indonesia could benefit people of all financial backgrounds. The government of Republic of Indonesia could start regulating the PV investment bankable to stimulate more people in Indonesia to participate in green energy investment. This collaboration potentially helps the government of the Republic of Indonesia in meeting its energy transition goal by 2045.

Real options valuation of photovoltaic investments: A case from Turkey

Investments in renewable energy resources have become inevitable due to increasing energy demand and energy prices, diminishing non-renewable energy resources, and the outgrowth of carbon footprints. Photovoltaic (PV) systems offer high solar energy potential in sustainable energy production whereas their high initial costs necessitate critical strategic valuation of investments. Valuation with conventional methods has been challenging due to existence of uncertainties such as fluctuating PV panel prices, changing meteorological conditions with certain effects on power generation, and governmental policies on energy market regulations. This study aims to propose a real options approach to valuation of residential rooftop PV system investments considering these uncertainties and demonstrate benefits of this approach with an application on the residential PV investment decisions in Turkey. The proposed method, Real Options Valuation (ROV) with Least-Squares Monte Carlo Simulation (LSMC) considers the deferral option of the investor by utilizing stochastic simulations, the discounted cash flow method, linear regression, and backward dynamic programming and thus evaluates the effects of uncertainties on financial attractiveness of residential PV investments. The case study findings proved that ROV with LSMC having a 7-years deferral option supported the investment decision with realizable cost-effective options while “NPV method” resulted in an infeasible investment. Scenario analysis was also conducted to explore policy options that can be used to promote solar energy investments in Turkey. This study has a potential to have practical contributions for investors as well as implications for policy-makers.

Motivation for households' investment in photovoltaics in Czechia: An exploratory factor analysis

Photovoltaics (PV) are an integral part of the climate neutrality transition; aside from reducing fossil fuel consumption, they provide additional and impactful private and societal benefits. When purchasing PV, the decision-making of small investors is a complex process. We investigate how households decide to invest in PV on rooftops. From a sample of over 2500 respondents, we found that while personal financial benefits are the primary motivation for acquiring PV plants, other variables, such as production independence and ecological benefits were almost equally important. The factor analysis revealed four latent motivation factors that drive the decision-making: economic, technical, ecological, and surroundings. Additionally, households are not fully homogenous in their decision-making. Education, income, and age influenced the attribution of importance the respondents gave to the specific factors. Conversely, the settlement size was not a strong predictor of the decision-making. The results imply the need for diversified policy design across different groups of investors.

The Economic Profitability of Photovoltaic Installations in Households in Poland from a New Policy Perspective

Solar energy is a source of energy that can meet a significant part of the demand for heat and electricity. However, its acquisition is associated with high variability both during the year and on individual days. The construction of installations due to changes in tariff systems, investment costs and subsidy programs raises doubts as to their profitability. The aim of this study was to assess the profitability of photovoltaic investments for households, considering public financial support. This study used RetScreen Expert software 8.1.2.13 to perform the entire analysis and performance cost, risk and sensitivity simulations. Climate data were imported from ground monitoring stations or from NASA global satellite or analytical data. The conducted research showed the profitability of investments in photovoltaics, even without state support. Differences between regions were insignificant. However, the support system has changed, extending the period of return on investment.

Photovoltaics: Panacea to Africa Sustainable Development

African countries are falling behind in attaining the sustainable development goals. They are in dire need of electricity, which had been declared the essential tool to achieve most goals, to meet their population’s utilizable energy requirement. With renewables being globally adopted energy options to save the changing climate and preserve the environment and biodiversity, photovoltaic (PV) is advocated to remedy the energy deficiency for sustainable development. All over Africa indicates viability in PV energy owing to the incident global solar radiation (Gh). Nigeria being a case study shows awareness of PV energy, which has manifested in the attitude towards its penetration and the expected benefits. With the anticipated threat of climate change on PV performances, the projected incident Gh across Nigeria has shown two epochs which are yet viable for PV energy by the year 2100. Foreseeable challenges in the PV penetration and investments have been presented as wrongdoings and whistleblowing is advocated as the policy that will ensure the PV penetration for sustainable development.

Assessment of the conditions for the development of the photovoltaic investment in the countries of the Visegrad Group – Comparative study of the researched countries

This paper presents the most important directions of contemporary changes taking place and their conditions on the solar energy market in the Visegrad Group countries. The aim of the article was to identify the factors influencing the development of solar energy in the V4 and assess their impact over the period of 2010–2018. In addition, presents changes in the photovoltaic market. The development of this field of energy is to, on the one hand, ensure the right amount of energy, and, minimize the negative impact on the natural environment, on the other. Such an approach is particularly important energy security and counteracting climate change contributing to significant economic losses. The development of solar energy systems is uneven, particularly in countries with similar economic and social conditions. The dynamic panel model using the generalized method of moments was applied. The changes occurring in this market showed a high variability of dependencies and the necessity of continuous monitoring of the transformations and effects of the policy pursued. The study points to the importance of economic conditions, in particular subsidies for investors, economic growth and the development of renewable energy sources in stimulating the development of solar energy. It showed the sense of ensuring a stable path of economic growth. The role of subsidies, often used in this market, is ambiguous and their effects are spread over time and show different directions of impact in particular time intervals. The article allows for a better understanding of the conditions for the development of photovoltaic investments, so that in the future photovoltaics can become a global source of energy. The results provide valuable information for shaping policies aimed at increasing the use of renewable energy sources. The research showed the great significance importance for the implementation of the development in accordance with the microeconomic model.

The effect of investment and financing optimization policies for developing photovoltaic power generation in Cameroon; a dynamic CGE model assessment

With less than a decade remaining until 2030, global investment in clean energy access falls short of the anticipated levels required to achieve the sustainable development goals. Notably, nations with the greatest gaps in electricity access, particularly those in Sub-Saharan Africa, have been largely excluded from energy access funding. Interestingly, the energy sector policy documents of these countries have neglected to incorporate financing strategies or plans for photovoltaic (PV) power generation. This discrepancy in the literature underscores the need to assess the economic impact of finance and investment policies that align with long-term PV power generation targets. To address this gap, our study employs a dynamic Computable General Equilibrium model to evaluate the macroeconomic consequences of achieving Cameroon’s Nationally Determined Contributions for PV power generation through optimized PV investment and finance. The model examines three policy scenarios: the Business-as-Usual, SC1 scenario involving a stable 100% increase in PV investment, and SC2 scenario featuring a stepwise 5%–100% increase in PV investment. By simulating these scenarios, we aim to shed light on their effects. The results reveal that SC1 and SC2 exhibit a 50% higher final demand for PV investment compared to the BAU scenario. Optimizing PV finance and investment in both scenarios leads to a slowdown in Cameroon’s economic growth, with SC1 showing a more pronounced impact. Additionally, SC2 encourages rapid decarbonization in energy-intensive sectors such as crude oil production and electricity generation industries. However, the SC1 policy scenario results in a rapid reduction in total investment expenditure for PV power generation. By 2035, PV power generation is projected to be three times higher in both SC1 and SC2 compared to the BAU scenario. The SC2 policy scenario also predicts relatively high levels of consumption among rural affluent and urban impoverished households. In conclusion, our study highlights the pressing need for enhanced investment and finance strategies to propel PV power generation, particularly in underserved regions. By leveraging the findings of this research, policymakers can make informed decisions and implement policies that promote sustainable and inclusive energy access, driving progress towards the fulfillment of SDGs.

Optimal Allocation and Sizing of Decentralized Solar Photovoltaic Generators Using Unit Financial Impact Indicator

A novel financial metric denominated unit financial impact indicator (UFII) is proposed to minimize the payback period for solar photovoltaic (PV) systems investments and quantify the financial efficiency of allocation and sizing strategies. However, uncontrollable environmental conditions and operational uncertainties, such as variable power demands, component failures, and weather conditions, can threaten the robustness of the investment, and their effect needs to be accounted for. Therefore, a new probabilistic framework is proposed for the robust and optimal positioning and sizing of utility-scale PV systems in a transmission network. The probabilistic framework includes a new cloud intensity simulator to model solar photovoltaic power production based on historical data and quantified using an efficient Monte Carlo method. The optimized solution obtained using weighted sums of expected UFII and its variance is compared against those obtained by using well-established economic metrics from literature. The efficiency and usefulness of the proposed approach are tested on the 14-bus IEEE power grid case study. The results prove the applicability and efficacy of the new probabilistic metric to quantify the financial effectiveness of solar photovoltaic investments on different nodes and geographical regions in a power grid, considering the unavoidable conditional and operational uncertainty.