Investments In Photovoltaic Systems Research Articles

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.

Research on the Design of Carbon-Neutralized Building in Rural China: A Case Study of “Impression of Yucun”

Energy conservation and emission reduction in rural buildings is essential to China’s response to climate change. Within the context of China’s ‘dual carbon’ initiative and the overarching goal of a ‘zero carbon countryside’, the first rural carbon-neutral building in China—‘Impression of Yucun’ was established in Anji County, Zhejiang Province. Accordingly, this study investigates building carbon-neutral design, calculating and analyzing the carbon emissions and offsets facilitated by carbon neutrality technology throughout the buildings’ life cycle. In addition, the comprehensive benefits of the buildings are evaluated from both technical and economic perspectives. The implementation pathway for rural carbon-neutral buildings is also explored. The results demonstrate that through the judicious application of carbon neutrality technology design, the inherent carbon emissions of the buildings amount to 120.91 t and the energy consumption during the operational phase of the building is 64,284.4 kWh/a, correlating to carbon emissions of 33.72 t. The case can theoretically reduce carbon emissions by 65.64 tCO2 annually by implementing carbon offset measures. Considering photovoltaic cell decay, the building can achieve a carbon-neutral state for the first time in the fifth year of operation, with a net carbon emission of −5.58 tCO2. Simultaneously, the investment in photovoltaic systems can be recouped between the seventh and ninth years of operation. This study can offer methodological reference and data support for designing and evaluating carbon-neutral buildings.

Bir Çatı Üstü Fotovoltaik Sistem için SAM ve PVsyst Simülasyonlarının Karşılaştırmalı Analizi

Turkiye is a country rich in renewable energy resources, one of which is its tremendous potential, especially in solar energy. Investments in photovoltaic systems are increasing day by day in order to evaluate this potential The simulations of these systems, which will be established while making investment plans, are very important in terms of investment return times. In this study, information and data were obtained from a working rooftop photovoltaic system and simulations were carried out using PVsyst and system advisor model (SAM) software. The simulation data was compared with the power plant's electricity generation data using statistical analysis methods of deviation, Root Mean Square Error (RMSD), and Mean Absolute Deviation (MAD). When all these analysis methods were evaluated, it was seen that the error and deviation values of the SAM software were lower on an annual basis. On the other hand, it has been determined that the error and deviation values of the PVsyst software are lower on a monthly basis.

Facilitating Investment in Photovoltaic Systems in Iran Considering Time-of-Use Feed-in-Tariff and Carbon Market

Photovoltaic (PV) systems are the leading solutions for reducing carbon dioxide (CO2) emissions in Iran’s energy system. However, there are some challenges to investing in PV systems in Iran, such as the low energy market price and the high investment cost of PV systems. Although the flat feed-in tariff (FiT) is defined to help purchase energy from the PV systems, it is not attractive to investors. In this paper, a mathematical formulation is developed for the planning problem of the PV systems with battery energy storages (BESs) considering two incentive policies: (1) Designing time-of-use FiT to encourage the PV systems to sell energy to the grid at peak hours (2) Participating in the carbon trading energy market. The insolation in Iran is calculated regarding mathematical formulations which divide Iran into eight zones. The results of the base case show high payback periods for all zones. In the presence of the incentive policies, the payback period decreases considerably from 5.46 yrs. to 3.75 yrs. for the best zone. Also, the net present value increases more than 170 percent in some zones compared to the base case.

The Renewable Energy Sources as a Lever of Sustainable Development

Purpose: The aim of this paper is to examine investors’ economic and social profiles in renewable energy sources with the help of widely used investment rating indicators, such as Net Present Value, Internal Grade of Performance and Profitability Index. Design/methodology/approach: The study used an empirical research, gathering economic data from investments in renewable energy sources in the Regional Units of Thessaloniki, Imathia and Pella. Data was collected through a structured questionnaire, administered with personal interviews with investors, by applying a simple random sampling method through a population-total number of investors retrieved from the Ministry of Environment, Energy, and Climate Change records. Findings: The results demonstrate that investments in renewable energy projects are sustainable and highly efficient on a case-by-case basis. The main criterion for accepting an investment element in a specific renewable energy technology application is the calculation of the Internal Rate of Return. The optimal investment pertains to photovoltaic system installations. Among the investments, hydroelectric and wind investments are also enticing. Investments in wind energy have the highest net present value, followed by investments in photovoltaic and hydroelectric systems. Concerning the profitability index, it is observed that investments in photovoltaic systems have a higher profitability index, followed by investments in wind and hydroelectric systems. As far as social characteristics are concerned, the majority of investors, regardless of their profession, invest in photovoltaics. Freelancers predominantly invest in wind energy projects, while employees mainly invest in hydroelectric projects. Research limitations/implications: The main limitation of the survey is related to the sample, which consisted of investors from three regional areas of Greece. A future study may be conducted to a larger sample, from all Greek regional units and examine possible differences in the results related to geographical area and profile of the investors. Originality/value: From the literature review, it is found that there is a lack of a comprehensive scientific method for evaluating the optimal investment choice in the renewable energy sector, leaving potential investors without a reliable framework for assessment of investment proposals. The current study can serve as a tool for investors in the renewable energy sector, assessing whether an investment yields financial gains compared to the capital allocated and therefore providing a tool to investors to know in advance the benefit of their potential investment.

Lookup Tables for Power Generation Performance of Photovoltaic Systems Covering 40 Geographic Locations (Wilayats) in the Sultanate of Oman, with and without Solar Tracking, and General Perspectives about Solar Irradiation

An energy modeler for solar photovoltaic (PV) systems may be limited to climatic data of certain major cities, not covering the one for which the PV system is intended. Additionally, a person not skilled in solar PV modeling may still desire a quick estimate of PV system electricity generation to help decide the level of investment in PV systems. This work addresses these points by establishing lookup tables to summarize predicted electricity generation, solar irradiation, and optimum orientation at various locations in the Sultanate of Oman. The results are produced by processing simulation data using the online open-access tool PVGIS (Photovoltaic Geographical Information System) of the European Commission’s Joint Research Centre (EC-JRC). The tables cover 40 out of the country’s 61 s-level administrative divisions (wilayats) and cover fixed and movable PV panels. The results show that the yearly electricity generation can change up to 11.86% due to the change of location. Two-axis PV tracking offers a small improvement (about 4% on average) over single-vertical-axis tracking but offers noticeable improvement (about 34% on average) over optimally oriented fixed PV panels. Monthly profiles of expected PV electricity generation, as well as the generation drop due to changing the PV mounting from free standing to building integrated, were examined for three locations. As general perspectives that may be of interest to global readers, this work provides quantitative evidence of the overall accuracy of the PVGIS-SARAH database through comparison with ground-measured global horizontal irradiation (GHI). In addition, a full example is presented considering 12 different countries in the northern and southern hemispheres that brings the attention of solar energy modelers to the level of errors they may encounter when the impact of longitude (thus, the exact location) is ignored for simplicity, while focus is given to the latitude.

Techno-Economic Viability of Agro-Photovoltaic Irrigated Arable Lands in the EU-Med Region: A Case-Study in Southwestern Spain

Solar photovoltaic (PV) energy is positioned to play a major role in the electricity generation mix of Mediterranean countries. Nonetheless, substantial increase in ground-mounted PV installed capacity could lead to competition with the agricultural use of land. A way to avert the peril is the electricity-food dual use of land or agro-photovoltaics (APV). Here, the profitability of a hypothetical APV system deployed on irrigated arable lands of southwestern Spain is analyzed. The basic generator design, comprised of fixed-tilt opaque monofacial PV modules on a 5 m ground-clearance substructure, featured 555.5 kWp/ha. Two APV shed orientations, due south and due southwest, were compared. Two 4-year annual-crop rotations, cultivated beneath the heightened PV modules and with each rotation spanning 24 ha, were studied. One crop rotation was headed by early potato, while the other was headed by processing tomato. All 9 crops involved fulfilled the two-fold condition of being usually cultivated in the area and compatible with APV shed intermitent shading. Crop revenues under the partial shading of PV modules were derived from official average yields in the area, through the use of two alternative sets of coefficients generated for low and high crop-yield shade-induced penalty. Likewise, two irrigation water sources, surface and underground, were compared. Crop total production costs, PV system investment and operating costs and revenues from the sale of electricity, were calculated. The internal rates of return (IRRs) obtained ranged from a minimum of 3.8% for the combination of southwest orientation, early-potato rotation, groundwater and high shade-induced crop-yield penalty, to a maximum of 5.6% for the combination of south orientation, processing-tomato rotation, surface water and low shade-induced crop-yield penalty.

Photovoltaic Modules Selection from Shading Effects on Different Materials

This study aims to provide photovoltaic module selection with better performance in the shading condition for improving production efficiency and reducing photovoltaic system investment cost through the symmetry concept, combining both solar energy mathematical and engineering principles. The study builds a symmetrical photovoltaic model and uses the series-parallel circuit theory, piecewise function and Matlab simulation. The voltage and current output characteristics of commercial photovoltaic modules made of different materials and structures are analyzed and their shading effects are evaluated. The results show that for each photovoltaic module, the output power is directly proportional to the irradiance. The output voltage of the photovoltaic module slightly increases and the output current greatly decreases from no shading to shading. The rate of output power reduction varies for each photovoltaic module type when the irradiance changes. The thin film modules show a lower output power reduction rate than crystalline photovoltaic modules from no shading to shading and they have good adaptability to shading. The use of thin film photovoltaic modules is recommended when the shading condition cannot be avoided.

Residential solar power profitability with thermal energy storage and carbon-corrected electricity prices

We study the economic profitability of residential solar photovoltaic (PV) systems in Finland. We show a moderate rate of returns (1.0% in Northern and 1.4% in Southern Finland) for the PV system investments with time-of-use hot water heating. Optimized hot water heating increases the rate of return by 0.6 percentage points. We internalize the negative externalities of greenhouse gas emissions from electricity generation by presenting the hourly electricity prices as a function of emission permit costs. A 10 €/tCO2 increase in carbon price improves the PV investment rate of return by 0.3 percentage points.

Technical, economic and environmental analysis of residential scale of the rooftop PV system in Surabaya, Indonesia

This work studies the technical, economic, and environmental of a 3 kWp rooftop photovoltaic (PV) system for residential in Surabaya, Indonesia. The studies were conducted based on the data from a built instalation of rooftop on-grid PV system. In addition, analysis were carried out using SolarGIS PV planner, RETSCreen, and PVsyst simulation tools. The results show that a 3 kWp rooftop system in Surabaya could produce electricity of about 3,898 kWh per year. Under present conditions, economic analysis shows that the rooftop PV system investment would give the payback period of about 5 years. Environmentally, the 3 kWp PV system would result of the reduction of greenhouse gas (GHG) emission of about 3.8 tons of CO2 per year.

Economic evaluation of photovoltaic and energy storage technologies for future domestic energy systems – A case study of the UK

Developments in photovoltaic (PV) technologies and mass production have resulted in continuous reduction of PV systems cost. However, concerns remain about the financial feasibility for investments in PV systems, which is facing a global shrinking of government support. This work evaluates the investment attractiveness of rooftop PV installations and the impact of energy storage systems (ESS), using the UK as a case study. The evaluation considers the location of installation, the temporal evolution of the supporting policies, local energy consumption, electricity price and cost of investment at different years. Furthermore, the use of electric vehicles (EVs) as an alternative to ESS for complementing PV systems is also investigated. Optimisation techniques are employed to schedule ESS and EV energy exchange in order to maximise the investment return. The results show that the net present value of PV systems in the UK has dropped from £28,650 in 2011 to £1,200 in 2017, due to declining government support towards PV technologies. It further shows that by incorporating ESS with PV systems, the benefit in 2017 can be increased by 46%. Conversely, employing the EV as energy storage would not bring additional benefits, considering the associated battery degradation and the current battery manufacturing cost.

Optimal Asset Planning for Prosumers Considering Energy Storage and Photovoltaic (PV) Units: A Stochastic Approach

In the distribution system, customers have increasingly use renewable energy sources and battery energy storage systems (BESS), transforming traditional loads into active prosumers. Therefore, methodologies are needed to provide prosumers with tools to optimize their investments and increase business opportunities. In this paper, a stochastic mixed integer linear programming (MILP) formulation is proposed to solve for optimal sizes of prosumer assets, considering the use of a BESS and photovoltaic (PV) units. The objective is to minimize the total cost of the system, which is defined as the combination of a solar PV system investment, BESS investment, maintenance costs of assets, and the cost of electricity supplied by the grid. The developed method defines the optimal size of PV units, the power/energy capacities of the BESS, and the optimal value for initial energy stored in the BESS. Both deterministic and stochastic approaches were explored. For each approach, the proposed model was tested for three cases, providing a varying combination of the use of grid power, PV units, and BESS. The optimal values from each case were compared, showing that there is potential to achieve more economic plans for prosumers when PV and BESS technologies are taken into account.

Evaluating economic feasibility and maximization of social welfare of photovoltaic projects developed for the Brazilian northeastern coast: An attribute agreement analysis

Recently, renewable energy projects, such as photovoltaic systems, have become interesting generation alternatives thanks to the incentive strategies developed by several countries. For the user of photovoltaic microgeneration, there is interest in the financial return of the investment, which is most often financed by public banks with a limited budget. Therefore, it is necessary to analyze variables related both to the point of view of the investor in microgeneration and to the public banks that subsidize them. However, defining the configuration of photovoltaic systems that guarantees the economic feasibility for those who invest without excessively burdening the public resource is a complex task and requires the analysis of different experts. To fill this gap, this paper proposes an innovative approach for evaluating photovoltaic projects based on Attribute Agreement Analysis. Experts on photovoltaic systems with different profiles and experience were asked about 16 scenarios, planned according to a factorial design with four factors: installed power capacity, PV cell type, debt ratio, and loan interest rate. The results demonstrated that the proposed approach fulfills the objective of simultaneously assessing the impact of investments in photovoltaic systems, considering the investors' and public banks’ viewpoints. In the case analyzed, although the evaluations are performed in a judicious way (Wwithin> 0.85), there is a low agreement between the experts (Woverall < 0.70). In addition, an expert bias was observed regarding loan interest for economic feasibility (W = 0.61), as well as a controversial perception of the maximization of social welfare (W = 0.2361). The Net Present Value profile, determined by the installed power capacity of the system, was used with these results to discuss the current Brazilian renewable energy financing policy. The results supported that experts tend to overestimate the impact of the financing interest rate on financial returns.

Solar Power Profitability with Demand Response and Carbon-Corrected Electricity Prices

We study the economic profitability of small-scale photovoltaic (PV) systems in the insolation conditions close to the Arctic Circle. We show moderate rate of returns (1.0 % in the Northern and 1.4 % in the Southern Finland) for the PV system investments with time-of-use hot water heating. Optimized hot water heating increases the rate of return by 0.6 percentage points. We internalize the negative externalities of greenhouse gas emissions from electricity generation by presenting the hourly electricity prices as a function of emission permit costs. A 10 €/tCO2 increase in carbon price improves the PV investment rate of return by 0.3 percentage points.

Simulation and Experimental Results of a 3 kWp Rooftop PV System in Surabaya

Simulation studies for a PV system would be useful for planning before real implementation, and to predict the cost for a large scale PV system. This work is to simulate a 3 kWp rooftop photovoltaic (PV) system under the climate of Surabaya, Indonesia. SolarGIS PV Planner and RETScreen simulation tools are used in this work. The simulation results are then compared with a full year of measurement results. The results of simulations show that a 3 kWp rooftop system could produce electricity of 4,200 kWh per year, while in the real measurement energy production is found about 3,898 kWh per year. There were slightly different results values of energy output between Simulation and real measurement of the PV system, however statistically it still can be accepted. Economic analysis shows that, under current conditions, a grid-connected PV system investment would give about 5 years of the payback period. Environmentally, the 3 kWp PV system would provide a reduction of CO2 emission of about 2.7 tons per year.

Simplified Method for Analyzing the Availability of Rooftop Photovoltaic Potential

This paper presents a new simplified method for analyzing the availability of photovoltaic potential on roofs. Photovoltaic systems on roofs are widespread as they represent a sustainable and safe investment and, therefore, a means of energy self-sufficiency. With the growth of photovoltaic systems, it is also crucial to correctly evaluate their global efficiency. Thus, this paper presents a comparison between known methods for estimating the photovoltaic potential (as physical, geographic and technical contributions) on a roof and proposes a new simplified method, that takes into account the economic potential of a building that already has installed a photovoltaic system. The measured values of generated electricity of the photovoltaic system were compared with calculated photovoltaic potential. In general, the annual physical, geographic, technical and economic potentials were 1273.7, 1253.8, 14.2 MWh, and 279.1 Wh, respectively. The analysis of all four potentials is essential for further understanding of the sustainable and safe investment in photovoltaic systems.

Could Photovoltaic Parks be More Profitable as an Investment Compared to Tree Crops in Mediterranean Water Scarce Regions?

Food security and access to electricity are considered core elements forthedevelopment of modern societies. In some cases, energy supplies are prioritized and therefore may compete with food resources. Since 2009, the sudden increase of photovoltaic system investments in Greece and particularly in Crete, as an effort to comply with the European directives on sustainable energy sources, led tothe replacement of many fieldsof traditional agricultural cultivations (such as olive and orange trees) with photovoltaic parks.The aim of this paper is to estimate the economic benefit of the investment of photovoltaic parks on farmlands compared to the cultivation of olive and citrus crops.To this end, two different scenarios were investigated. In the first scenario, the replacement of a 1000 m2 olive grove area,located in highly productive land, witha small photovoltaic park of 25 kW was investigated. The second scenarioconsidersa much larger photovoltaic park of 100 kW which replaces an orange grove of 3500 m2 at highly productive land. It was found that in both cases,the profitability of the investment, for a time span of 20 yrs, was highly dependent on the time when the power purchase agreement was signed. As a general rule, investments made before 2013 can be characterized as profitable. After 2013, the situation became more complex and the financial success of the investments is not guaranteed.

Addressing Energy Poverty through Transitioning to a Carbon-Free Environment

The excessive consumption of fossil fuels not only leads to resource depletion, but also involves negative environmental effects on both public health and the climate. However, Greece’s renewable energy (RE) capacity is considerable and could meet a great part of the country’s energy needs while helping to tackle the ecological problem our planet faces. At the same time, the deployment of renewable energy sources (RES) can facilitate the creation of new jobs and enable households to become energy independent, while addressing energy poverty. The present study investigates the views and attitudes of citizens of the Thessaloniki conurbation towards RES. To collect the data, structured questionnaires were used, which were completed through personal interviews. Moreover, random sampling was performed to select the sample, and in total 420 citizens participated in the survey. Results showed that the respondents supported the replacement of lignite plants with renewable energy sources since they perceived that they constitute a necessary solution providing opportunities for economic growth and improvement to their quality of life. Finally, the vast majority expressed increased interest in future investment in photovoltaic systems, which in their opinion could contribute to improving air quality and increasing the energy independence not only of Greece but also of households.

Stochastic analysis of economic viability of photovoltaic panels installation for big consumers in Brazil

In the last few years, the growth of solar power worldwide has been remarkable and, different from other sources, it allows small and big consumers to play an important role in the electric system. In Brazil, for big consumers, apart from the benefit associated with energy cost reduction, the photovoltaic system can also reduce the peak demand as well, making the investment even more attractive. Therefore, one of the main challenges for consumers is to accurately estimate the impact of photovoltaic systems on their costs. To do that, the estimation of their future energy consumption, peak demand and energy generation from photovoltaic systems is important to properly compute the economic advantages of such investments.This paper proposes to solve this problem by simulating future energy scenarios of energy consumption, generation and peak demand and correlating them to compute the optimum quantity of photovoltaic panels to be installed and the peak demand contract with the utility by solving a mixed integer linear stochastic optimization model. In the first part of this work, a Box & Jenkins modelling is used to estimate the parameters of the energy consumption, generation and peak demand in a correlated way. In the second part, a stochastic optimization model is applied using a convex combination of the Expected Value and Conditional Value-at-Risk, which were used as risk metrics to compute the optimum number of panels and the best peak demand contract. To illustrate the proposed approach, a case study of a real big consumer is presented, considering a specific contract applied in Brazil. The results allow us to analyze the investment in photovoltaic systems considering the risk level of the consumer and the correlation of all variables involved. In addition to that, the proposed paper can be used as a reference model to be applied in different modalities in Brazil and other countries.

The impacts of photovoltaic electricity self-consumption on value transfers between private and public stakeholders in France

Between 2016 and 2017, the French Government made significant advances in shaping the new legislative structure in order to support photovoltaic electricity self-consumption, which is a growing challenge for many countries developing renewables close to the grid parity. By analyzing all the main financial flows linked to the electric bill, the sales of electricity and the investment in photovoltaic systems, this study aims to identify the stakeholders that benefit or suffer the most from value transfers caused by photovoltaic electricity self-consumption compared to full injection. The results suggest a shortfall of revenue for the distribution system operator. An increase in the electric bill of other grid customers will undoubtedly offset this shortfall. Simultaneously, the French State would make savings for individual self-consumption projects below 100 kWp. The new policy also incentivizes the self-consumption for big consumers for whom it is more profitable and competitive. Self-consumption projects tend to be economically more attractive than projects in full injection when the photovoltaic system is not oversized for the electric demand. The policy may consequently imply risks for the equalization of electric grid charges among consumers, the sustainability of the current business strategy of utilities and the security of supply.