Using DNPV for valuing investments in the energy sector: A solar project case study

R. David Espinoza and Javier Rojo

Renewable Energy, 2015, vol. 75, issue C, 44-49

Abstract: In this paper, a practical application of a valuation method that decouples the time value of money from the risk associated with the project is used to value an investment on a solar project. The proposed method is termed decoupled net present value (DNPV). A simple investment renewable energy project is presented using both the traditional NPV techniques and the proposed DNPV. The proposed methodology provides a consistent valuation method free from the problems typically associated with the application of traditional NPV and, more importantly, it allows a seamless integration of project risk assessment performed by technical experts and risk management implemented by business executives into the financial evaluation of the project.

Keywords: DNPV; Renewable energy investment; Solar energy; Infrastructure investment (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:75:y:2015:i:c:p:44-49

DOI: 10.1016/j.renene.2014.09.011

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