Estimating the Financial Payback Period for Renewable Energy Investment - A Quasi-Systematic Review

Collins C Ngwakwe
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Collins C Ngwakwe: University of Limpopo, Polokwane, South Africa

Oblik i finansi, 2025, issue 2, 59-66

Abstract: Accounting and finance discipline is intricately connected to the global campaign and advocacy for sustainable energy alternatives that balance costs and environmental sustainability. This paper aims to use the literature review to estimate the financial payback period for renewable energy investment. Thus, it encourages the financial investment of renewable energy and the use of renewable energy to assist in sustainable energy adoption. The paper applied a quasi-systematic review to explore the concept from prior literature data. Findings from the final selected empirical literature show different financial payback periods (FPP) and energy payback time (EPBT). In particular, residential solar PV technology has an estimated expected financial payback period of 7 to 15 years, giving an average FPP of 12 years. Correspondingly, residential solar PV technology has an associated energy payback time of 1 - 4 years with an average EPBT of 2.5 years. Large-scale (or utility) PV technology has an expected FPP of 3 to 12 years, with an average of about 7.5 years. The associated energy payback time (EPBT) for large-scale (or utility) PV technology ranges between 1 and 5 years, with an average EPBT of 3 years. For off-grid photovoltaic systems (for rural areas), there is an expected FPP of 4 - 6 years, which gives an average of 5 years. Similarly, an associated EPBT of 2 - 4 years gives an average EPBT of 3 years. The paper offers insight into financial payback and energy payback for users and investors in making renewable energy alternative investment choices. The results of this study are expected to help consumers and investors make effective decisions about investing in renewable energy. Incorporating data on the financial payback periods of renewable energy and energy payback times into business school lectures and sustainability projects will improve stakeholders' understanding of renewable energy investments.

Keywords: financial payback period; energy payback time; renewable energy investment; Solar PV technology; environmental accounting (search for similar items in EconPapers)
JEL-codes: G11 Q20 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:iaf:journl:y:2025:i:1:p:59-66

DOI: 10.33146/2307-9878-2025-2(108)-59-66

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