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Impact of the Self-Consumption of Electricity on the Profitability of the Investment into a Photovoltaic Installation: The Case of a Company in Poland

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  • Agnieszka Joanna Drzymala
  • Ewa Korzeniewska

Abstract

Purpose: The main aim of this paper is an attempt to calculate the impact of the self-consumption of electricity in an exemplary enterprise with the annual electricity demand 42.2 MWh on the profitability of investments in a photovoltaic installation from the point of view of the law introduced in Poland in 2021 - 2022. Approach/Methodology/Design: The analysis of the profitability of the photovoltaic power plant was carried out on the basis of the method of assessing the economic efficiency of an investment using the DCF method with the assumed discount rate. Findings: The obtained results can estimate the future value of the investment, capitalization, discounted value, i.e., the present capital value, which is derived from future income. Practical Implications: The obtained results will help to indicate what is the optimal (maximum) selection of the size of the photovoltaic installation based on the company's electricity demand in the Net-billing system applicable in Poland. Originality/Value: The obtained results may indicate that investing more capital in photovoltaics allows for the construction of an installation with greater power, but at the same time leads to a reduction in the self-consumption of electricity during its production and significantly affects the profitability of such an investment. Profitability estimation was carried out with reference to an alternative investment in relatively low-risk treasury bonds. The economic net present value assumes that the future buying or selling value of money will not be the same as it is today. Factors that significantly affect the investment profitability assessment are given.

Suggested Citation

  • Agnieszka Joanna Drzymala & Ewa Korzeniewska, 2022. "Impact of the Self-Consumption of Electricity on the Profitability of the Investment into a Photovoltaic Installation: The Case of a Company in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 316-332.
    • Handle: RePEc:ers:journl:v:xxv:y:2022:i:2:p:316-332
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    References listed on IDEAS

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    1. Beata Bieszk-Stolorz & Iwona Markowicz, 2021. "Risk of Decline in Share Prices of Energy and Fuel Sector on the Warsaw Stock Exchange During the Two Waves of the COVID-19 Pandemic," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 977-996.
    2. Roman Sikora & Przemysław Markiewicz, 2020. "Assessment of Colorimetric Parameters for HPS Lamp with Electromagnetic Control Gear and Electronic Ballast," Energies, MDPI, vol. 13(11), pages 1-21, June.
    3. Soto, Esteban A. & Bosman, Lisa B. & Wollega, Ebisa & Leon-Salas, Walter D., 2022. "Comparison of net-metering with peer-to-peer models using the grid and electric vehicles for the electricity exchange," Applied Energy, Elsevier, vol. 310(C).
    4. Małgorzata Rataj & Justyna Berniak-Woźny & Marlena Plebańska, 2021. "Poland as the EU Leader in Terms of Photovoltaic Market Growth Dynamics—Behind the Scenes," Energies, MDPI, vol. 14(21), pages 1-19, October.
    5. Beata Bieszk-Stolorz & Iwona Markowicz, 2021. "Decline in Share Prices of Energy and Fuel Companies on the Warsaw Stock Exchange as a Reaction to the COVID-19 Pandemic," Energies, MDPI, vol. 14(17), pages 1-17, August.
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    Cited by:

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    More about this item

    Keywords

    Renewable energy; photovoltaic power; cost-effectiveness of photovoltaic.;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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