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From costs to prices: economic analysis of photovoltaic energy and services
Author(s) -
Chabot Bernard
Publication year - 1998
Publication title -
progress in photovoltaics: research and applications
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.286
H-Index - 131
eISSN - 1099-159X
pISSN - 1062-7995
DOI - 10.1002/(sici)1099-159x(199801/02)6:1<55::aid-pip191>3.0.co;2-9
Subject(s) - profitability index , photovoltaic system , environmental economics , electricity , renewable energy , internal rate of return , grid , net present value , economics , computer science , reliability engineering , operations management , electrical engineering , finance , engineering , mathematics , microeconomics , production (economics) , geometry
A global economic analysis methodology is proposed in order to simplify the cost and the profitability assessment of energy and services delivered by photovoltaic (PV) systems. As examples, equations and graphic tools derived from this methodology give directly the overall discounted cost (ODC) of electricity delivered by grid‐connected PV power plants and the ODC of water delivered by a stand‐alone PV pumping system. The main criteria used for profitability analysis of PV projects are reviewed: net present value, internal rate of return and profitability index (PI). A simple method with associated equations and graphic tools is presented in order to assess the profitability of PV projects from their PI. Examples of profitability analysis of present and future grid‐connected PV power plants built and operated by an independent power producer are presented and discussed, together with examples of stand‐alone PV water pumping systems operated by the local community in developing countries. In both cases, equations and specific graphic tools are presented. Specific graphs can be used with different monetary units, different sizes and different investment costs of PV projects. © 1998 John Wiley & Sons, Ltd.