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

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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)

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.

Suggested Citation

  • Federica Cucchiella & Idiano D’Adamo & Massimo Gastaldi, 2017. "Economic Analysis of a Photovoltaic System: A Resource for Residential Households," Energies, MDPI, vol. 10(6), pages 1-15, June.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:6:p:814-:d:101614
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    References listed on IDEAS

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