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The Prospect of Rooftop Photovoltaic Development Considering Global Horizontal Irradiation Uncertainty and Government Policies: A Case of Java Island, Indonesia

Author

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  • Rizki Firmansyah Setya Budi

    (Department of Electrical and Information Engineering, Universitas Gadjah Mada, Yogyakarta, Indonesia.)

  • Sarjiya Sarjiya

    (Department of Electrical and Information Engineering, Universitas Gadjah Mada, Yogyakarta, Indonesia.)

  • Sasongko Pramoho Hadi

    (Department of Electrical and Information Engineering, Universitas Gadjah Mada, Yogyakarta, Indonesia.)

Abstract

Global horizontal irradiation uncertainty and government policy significantly affect the economics of rooftop photovoltaic development. Unfortunately, previous studies neglect these aspects. Therefore, it is necessary to undertake the economic analysis of rooftop photovoltaic development by considering its global horizontal irradiation uncertainty and government policies. This research creates a model that can be used to perform analysis and assess rooftop photovoltaic development prospects by considering irradiation uncertainty and government policies. The attractiveness of rooftop photovoltaic development is indicated by the value of the Levelized cost of electricity, net present value, and internal rate of return. Monte Carlo simulation models irradiation uncertainty. Java Island in Indonesia is used as a case study to show the performance of the proposed model. The research results show that the rooftop photovoltaic is not economically viable if built by the utility. Rooftop photovoltaic systems are only profitable when built by the private sector and is used for internal usage only. These rooftop photovoltaic investments provide an internal rate of return above 14%, which shows that investors with green capital funds and local investors are interested in investing. The emission reductions from a 100 m2 rooftop photovoltaic system vary from 214 to 384 tons of CO2 per year.

Suggested Citation

  • Rizki Firmansyah Setya Budi & Sarjiya Sarjiya & Sasongko Pramoho Hadi, 2022. "The Prospect of Rooftop Photovoltaic Development Considering Global Horizontal Irradiation Uncertainty and Government Policies: A Case of Java Island, Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 12(4), pages 104-116, July.
    • Handle: RePEc:eco:journ2:2022-04-14
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    References listed on IDEAS

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    1. Haegermark, Maria & Kovacs, Peter & Dalenbäck, Jan-Olof, 2017. "Economic feasibility of solar photovoltaic rooftop systems in a complex setting: A Swedish case study," Energy, Elsevier, vol. 127(C), pages 18-29.
    2. Hidayatno, Akhmad & Setiawan, Andri D. & Wikananda Supartha, I Made & Moeis, Armand O. & Rahman, Irvanu & Widiono, Eddie, 2020. "Investigating policies on improving household rooftop photovoltaics adoption in Indonesia," Renewable Energy, Elsevier, vol. 156(C), pages 731-742.
    3. Sueyoshi, Toshiyuki & Wang, Derek, 2017. "Measuring scale efficiency and returns to scale on large commercial rooftop photovoltaic systems in California," Energy Economics, Elsevier, vol. 65(C), pages 389-398.
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    Cited by:

    1. Ahmad Adhiim Muthahhari & Candra Febri Nugraha & Naufal Hilmi Fauzan & Lukman Subekti & Rizki Firmansyah Setya Budi, 2024. "Accelerating Renewable Energy Integration in Energy Planning Considering the PV Techno-Economics and Hourly Profile, Case Study: Indonesian Power Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 490-498, March.

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    More about this item

    Keywords

    Government Policies; Economics of Rooftop Photovoltaic; Global Horizontal Irradiation Uncertainty; Carbon Dioxide Emission;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other

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