Photovoltaic Farms: Economic Efficiency of Investments in South-East Poland

Joanna Żurakowska-Sawa (), Arkadiusz Gromada (), Anna Trocewicz, Adrianna Wojciechowska, Marcin Wysokiński and Anetta Zielińska
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Joanna Żurakowska-Sawa: Faculty of Economic Sciences, John Paul II University in Biała Podlaska, 21-500 Biała Podlaska, Poland
Arkadiusz Gromada: Institute of Economics and Finance, Warsaw University of Life Sciences, 02-787 Warsaw, Poland
Anna Trocewicz: Faculty of Economic Sciences, John Paul II University in Biała Podlaska, 21-500 Biała Podlaska, Poland
Adrianna Wojciechowska: Institute of Rural and Agricultural Development, Polish Academy of Sciences, Nowy Świat 72, 00-330 Warsaw, Poland
Marcin Wysokiński: Institute of Economics and Finance, Warsaw University of Life Sciences, 02-787 Warsaw, Poland
Anetta Zielińska: Academy in Piotrków Trybunalski, 97-300 Piotrków Trybunalski, Poland

Energies, 2025, vol. 18, issue 1, 1-38

Abstract: The main objective of this study was to identify the status and development opportunities and evaluate the economic viability of investments in large-scale photovoltaic installations in Southeastern Poland. The primary data sources used in the study were empirical materials from all photovoltaic installations implemented with support from the Regional Operational Program of the Lublin Voivodeship (ROP WL) for 2007–2013 (31 projects). The following indices were used to evaluate the economic efficiency of the investments studied: rate of return on investment (ROI), simple payback period (SPP), net present value of investment (NPV), internal rate of return (IRR), discounted payback period (DPBT), and averaged unit cost of electricity generation (LCOE). They were carried out for three scenarios–baseline, conservative, and optimistic–in two variants, for actual capital expenditures considering financial support used and without subsidies. It was determined that the expected lifetime of the studied investments would be 25 years. The sensitivity analysis shows that, regardless of the adopted scenario, investments in solar thermal power with the level of support that took place under the 2007–2013 financial perspective were reasonable long-term investments. In the least favorable scenario (conservative) included in the analysis, the discounted payback period ranged from 8.1 to 22 years. In the optimistic scenario, DPBT values ranged from 5.6 years to more than 15 years. The payback period (both simple and discounted) for investments with the subsidy was, on average, almost twice as fast as for investments without the subsidy, while the average unit cost of electricity generation with the subsidy was about 30% lower than without it.

Keywords: photovoltaic installations; economic viability; economic efficiency; ROI; SPP; NPV; IRR (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: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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