Evaluation Model for Investment in Solar Photovoltaic Power Generation Using Fuzzy Analytic Hierarchy Process

BumChoong Kim, Juhan Kim and Jinsoo Kim
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BumChoong Kim: Department of Earth Resources and Environmental Engineering, Hanyang University, Seoul 04763, Korea
Juhan Kim: Department of Earth Resources and Environmental Engineering, Hanyang University, Seoul 04763, Korea
Jinsoo Kim: Department of Earth Resources and Environmental Engineering, Hanyang University, Seoul 04763, Korea

Sustainability, 2019, vol. 11, issue 10, 1-23

Abstract: Owing to rapid growth in the Asian solar photovoltaic (PV) power market, decision-making models are required to develop efficient investment strategies. Previous studies have largely focused on technological conditions and macroeconomic indicators, but not on the increasing needs of the financial sector. In this study, we developed an evaluation model of solar PV investment and financial factors at the project level. The model applies the fuzzy analytic hierarchy process and selects appropriate evaluation indicators for investment by emphasizing financial factors such as access to finance and exit strategies after the initial investment. Furthermore, we derived the relative importance of the indicators for each stakeholder. Stakeholder analysis enables comparison by quantifying the risks of each market participant. Economic factors (71.57%) were selected as the most important evaluation factors, followed by policy factors (16.26%), and technical factors (12.17%). Higher weights were assigned to indicators that directly affect profitability. Stakeholders showed significant differences in policy factors. Power generation companies showed higher weight values in policy factors than other groups. Quantification of differences in perceptions provides basic data for establishing effective investment strategies and developing policies. Therefore, the proposed model will contribute to more efficient solar PV project development.

Keywords: solar PV; financial investment; evaluation indicators; stakeholder; fuzzy AHP (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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