Economic Analysis of a Photovoltaic System: A Resource for Residential Households

Federica Cucchiella, Idiano D’Adamo and Massimo Gastaldi
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Federica Cucchiella: Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, 67100 L’Aquila, Italy
Idiano D’Adamo: Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, 67100 L’Aquila, Italy
Massimo Gastaldi: Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, 67100 L’Aquila, Italy

Energies, 2017, vol. 10, issue 6, 1-15

Abstract: New installed annual solar photovoltaic (PV) capacity was equal to 76.1 GW in 2016 (+49%), reaching the total of 305 GW around the world. PV sources are able to achieve a greater energy independence, to tackle the climate change and to promote economic opportunities. This work proposes an economic analysis based on well-known indicators: Net Present Value (NPV), Discounted Payback Time (DPBT) and Levelized Cost of Electricity (LCOE). Several case studies are evaluated for residential households. They are based on three critical variables: plant size (1, 2, 3, 4, 5 and 6 kW), levels of insolation (1350, 1450 and 1550 kWh/(m 2 ×y)) and share of self-consumption (30%, 40% and 50%). The profitability is verified in all case studies examined in this work. The role of self-consumption, that is the harmonization between demanded and produced energy, is strategic in a mature market to improve financial performance. A sensitivity analysis, based on both electricity purchase and sales prices (critical variables), confirms these positive results. The Reduction in the Emissions of Carbon Dioxide (ER cd ) signifies an environmental improvement when a PV system is used as an alternative to a mix of fossil fuels. Finally, a policy proposal is examined based on a fiscal deduction of 50% fixing the period of deduction equal to 5 years.

Keywords: economic analysis; energy; photovoltaic; residential sector; sustainability (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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