IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v8y2015i11p12350-12880d58716.html
   My bibliography  Save this article

Industrial Photovoltaic Systems: An Economic Analysis in Non-Subsidized Electricity Markets

Author

Listed:
  • Federica Cucchiella

    (Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, L’Aquila 67100, Italy)

  • Idiano D’Adamo

    (Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, L’Aquila 67100, Italy)

  • Paolo Rosa

    (Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Piazza L. Da Vinci 32, Milano 20133, Italy)

Abstract

Photovoltaic (PV) systems are becoming a relevant electricity source, characterised by a growing trend in the last years. This paper analyses the economic feasibility of investments in industrial PV systems of different sizes (200 kW, 400 kW, 1 MW, and 5 MW), in the absence of subsidies, and in a mature market (Italy). The selected indicators for this kind of assessment are net present value (NPV) and discounted payback time (DPBT). Furthermore, the environmental advantage in comparison to fossil sources of energy is evaluated through the reduction of carbon dioxide emissions (ER cd ). Finally, a sensitivity analysis on critical variables (percentage of self-consumed energy, average annual insolation rate, annual electricity purchase price, annual electricity sale price, unitary investment cost and opportunity cost) is conducted. Results highlight the strategic role of self-consumption in a market characterised by an absence of public policy incentives and the presence of interesting economic opportunities for industrial applications.

Suggested Citation

  • Federica Cucchiella & Idiano D’Adamo & Paolo Rosa, 2015. "Industrial Photovoltaic Systems: An Economic Analysis in Non-Subsidized Electricity Markets," Energies, MDPI, vol. 8(11), pages 1-16, November.
    • Handle: RePEc:gam:jeners:v:8:y:2015:i:11:p:12350-12880:d:58716
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/8/11/12350/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/8/11/12350/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. AfDB AfDB, . "AfDB Group Annual Report 2011 (Portuguese)," Annual Report, African Development Bank, number 393.
    2. Ming-Zhi Gao, Anton & Fan, Chien-Te & Kai, Ji-Jung & Liao, Chao-Ning, 2015. "Sustainable photovoltaic technology development: step-by-step guidance for countries facing PV proliferation turmoil under the feed-in tariff scheme," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 156-163.
    3. Guopeng Song & Hao Chen & Bo Guo, 2014. "A Layered Fault Tree Model for Reliability Evaluation of Smart Grids," Energies, MDPI, vol. 7(8), pages 1-23, July.
    4. Cassandra L. Thiel & Nicole Campion & Amy E. Landis & Alex K. Jones & Laura A. Schaefer & Melissa M. Bilec, 2013. "A Materials Life Cycle Assessment of a Net-Zero Energy Building," Energies, MDPI, vol. 6(2), pages 1-17, February.
    5. Huan-Liang Tsai, 2014. "Design and Evaluation of a Photovoltaic/Thermal-Assisted Heat Pump Water Heating System," Energies, MDPI, vol. 7(5), pages 1-20, May.
    6. Alexander T. Dale & André Frossard Pereira de Lucena & Joe Marriott & Bruno Soares Moreira Cesar Borba & Roberto Schaeffer & Melissa M. Bilec, 2013. "Modeling Future Life-Cycle Greenhouse Gas Emissions and Environmental Impacts of Electricity Supplies in Brazil," Energies, MDPI, vol. 6(7), pages 1-27, July.
    7. Mandell, Svante, 2011. "Carbon emission values in cost benefit analyses," Transport Policy, Elsevier, vol. 18(6), pages 888-892, November.
    8. Javier Marcos & Iñigo De la Parra & Miguel García & Luis Marroyo, 2014. "Control Strategies to Smooth Short-Term Power Fluctuations in Large Photovoltaic Plants Using Battery Storage Systems," Energies, MDPI, vol. 7(10), pages 1-27, October.
    9. Amanda D. Cuellar & Howard Herzog, 2015. "A Path Forward for Low Carbon Power from Biomass," Energies, MDPI, vol. 8(3), pages 1-15, February.
    10. Claudia Rahmann & Alfredo Castillo, 2014. "Fast Frequency Response Capability of Photovoltaic Power Plants: The Necessity of New Grid Requirements and Definitions," Energies, MDPI, vol. 7(10), pages 1-17, September.
    11. Ghosh, Saptak & Nair, Akhilesh & Krishnan, S.S., 2015. "Techno-economic review of rooftop photovoltaic systems: Case studies of industrial, residential and off-grid rooftops in Bangalore, Karnataka," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 1132-1142.
    12. Filippo Sgroi & Salvatore Tudisca & Anna Maria Di Trapani & Riccardo Testa & Riccardo Squatrito, 2014. "Efficacy and Efficiency of Italian Energy Policy: The Case of PV Systems in Greenhouse Farms," Energies, MDPI, vol. 7(6), pages 1-17, June.
    13. Cucchiella, Federica & D’Adamo, Idiano & Lenny Koh, S.C. & Rosa, Paolo, 2015. "Recycling of WEEEs: An economic assessment of present and future e-waste streams," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 263-272.
    14. Juliana Subtil Lacerda & Jeroen C. J. M. Van den Bergh, 2014. "International Diffusion of Renewable Energy Innovations: Lessons from the Lead Markets for Wind Power in China, Germany and USA," Energies, MDPI, vol. 7(12), pages 1-28, December.
    15. Ahmad Hasan & Sarah Josephine McCormack & Ming Jun Huang & Brian Norton, 2014. "Energy and Cost Saving of a Photovoltaic-Phase Change Materials (PV-PCM) System through Temperature Regulation and Performance Enhancement of Photovoltaics," Energies, MDPI, vol. 7(3), pages 1-14, March.
    16. Thomas Huld & Ana M. Gracia Amillo, 2015. "Estimating PV Module Performance over Large Geographical Regions: The Role of Irradiance, Air Temperature, Wind Speed and Solar Spectrum," Energies, MDPI, vol. 8(6), pages 1-23, June.
    17. Paul E. Hardisty & Tom S. Clark & Robert G. Hynes, 2012. "Life Cycle Greenhouse Gas Emissions from Electricity Generation: A Comparative Analysis of Australian Energy Sources," Energies, MDPI, vol. 5(4), pages 1-26, March.
    18. Riccardo Squatrito & Filippo Sgroi & Salvatore Tudisca & Anna Maria Di Trapani & Riccardo Testa, 2014. "Post Feed-in Scheme Photovoltaic System Feasibility Evaluation in Italy: Sicilian Case Studies," Energies, MDPI, vol. 7(11), pages 1-19, November.
    19. Gustavo Azevedo Xavier & Delly Oliveira Filho & José Helvecio Martins & Paulo Marcos de Barros Monteiro & Antônia Sônia Alves Cardozo Diniz, 2015. "Simulation of Distributed Generation with Photovoltaic Microgrids—Case Study in Brazil," Energies, MDPI, vol. 8(5), pages 1-21, May.
    20. Luthander, Rasmus & Widén, Joakim & Nilsson, Daniel & Palm, Jenny, 2015. "Photovoltaic self-consumption in buildings: A review," Applied Energy, Elsevier, vol. 142(C), pages 80-94.
    21. Wissem, Zghal & Gueorgui, Kantchev & Hédi, Kchaou, 2012. "Modeling and technical–economic optimization of an autonomous photovoltaic system," Energy, Elsevier, vol. 37(1), pages 263-272.
    22. Julio Pascual & Pablo Sanchis & Luis Marroyo, 2014. "Implementation and Control of a Residential Electrothermal Microgrid Based on Renewable Energies, a Hybrid Storage System and Demand Side Management," Energies, MDPI, vol. 7(1), pages 1-28, January.
    23. Mundo-Hernández, Julia & de Celis Alonso, Benito & Hernández-Álvarez, Julia & de Celis-Carrillo, Benito, 2014. "An overview of solar photovoltaic energy in Mexico and Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 639-649.
    24. Zifa Liu & Wenhua Zhang & Changhong Zhao & Jiahai Yuan, 2015. "The Economics of Wind Power in China and Policy Implications," Energies, MDPI, vol. 8(2), pages 1-18, February.
    25. Andrea M. Feldpausch-Parker & Morey Burnham & Maryna Melnik & Meaghan L. Callaghan & Theresa Selfa, 2015. "News Media Analysis of Carbon Capture and Storage and Biomass: Perceptions and Possibilities," Energies, MDPI, vol. 8(4), pages 1-17, April.
    26. Alberto Dolara & Francesco Grimaccia & Sonia Leva & Marco Mussetta & Emanuele Ogliari, 2015. "A Physical Hybrid Artificial Neural Network for Short Term Forecasting of PV Plant Power Output," Energies, MDPI, vol. 8(2), pages 1-16, February.
    27. AfDB AfDB, . "AfDB Group Annual Report 2011 (Arabic)," Annual Report, African Development Bank, number 394.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Allen H. Hu & Lance Hongwei Huang & Sylvia Lou & Chien-Hung Kuo & Chin-Yao Huang & Ke-Jen Chian & Hao-Ting Chien & Hwen-Fen Hong, 2016. "Assessment of the Carbon Footprint, Social Benefit of Carbon Reduction, and Energy Payback Time of a High-Concentration Photovoltaic System," Sustainability, MDPI, vol. 9(1), pages 1-20, December.
    2. Vladimír Hönig & Petr Prochazka & Michal Obergruber & Luboš Smutka & Viera Kučerová, 2019. "Economic and Technological Analysis of Commercial LNG Production in the EU," Energies, MDPI, vol. 12(8), pages 1-17, April.
    3. Nuria Novas & Alfredo Alcayde & Isabel Robalo & Francisco Manzano-Agugliaro & Francisco G. Montoya, 2020. "Energies and Its Worldwide Research," Energies, MDPI, vol. 13(24), pages 1-41, December.
    4. Dariusz Kurz & Agata Nowak, 2023. "Analysis of the Impact of the Level of Self-Consumption of Electricity from a Prosumer Photovoltaic Installation on Its Profitability under Different Energy Billing Scenarios in Poland," Energies, MDPI, vol. 16(2), pages 1-40, January.
    5. Cucchiella, Federica & D’Adamo, Idiano & Gastaldi, Massimo & Koh, SC Lenny & Rosa, Paolo, 2017. "A comparison of environmental and energetic performance of European countries: A sustainability index," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 401-413.
    6. Rômulo de Oliveira Azevêdo & Paulo Rotela Junior & Luiz Célio Souza Rocha & Gianfranco Chicco & Giancarlo Aquila & Rogério Santana Peruchi, 2020. "Identification and Analysis of Impact Factors on the Economic Feasibility of Photovoltaic Energy Investments," Sustainability, MDPI, vol. 12(17), pages 1-40, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ali, Ghaffar & Bashir, Muhammad Khalid & Ali, Hassan & Bashir, Muhammad Hamid, 2016. "Utilization of rice husk and poultry wastes for renewable energy potential in Pakistan: An economic perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 61(C), pages 25-29.
    2. Trigo-González, Mauricio & Batlles, F.J. & Alonso-Montesinos, Joaquín & Ferrada, Pablo & del Sagrado, J. & Martínez-Durbán, M. & Cortés, Marcelo & Portillo, Carlos & Marzo, Aitor, 2019. "Hourly PV production estimation by means of an exportable multiple linear regression model," Renewable Energy, Elsevier, vol. 135(C), pages 303-312.
    3. Pittaway, Timothy & Niekerk, Pieter van, 2015. "Horizon- Scanning the Ostrich Industry with Bibliometric Indicators," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 10(01), pages 1-8, March.
    4. Rômulo de Oliveira Azevêdo & Paulo Rotela Junior & Luiz Célio Souza Rocha & Gianfranco Chicco & Giancarlo Aquila & Rogério Santana Peruchi, 2020. "Identification and Analysis of Impact Factors on the Economic Feasibility of Photovoltaic Energy Investments," Sustainability, MDPI, vol. 12(17), pages 1-40, September.
    5. Fiordelisi, Franco & Mare, Davide Salvatore, 2014. "Competition and financial stability in European cooperative banks," Journal of International Money and Finance, Elsevier, vol. 45(C), pages 1-16.
    6. Escobar, Octavio R. & Le Chaffotec, Alexandra, 2015. "The influence of OPEC membership on economic development: A transaction cost comparative approach," Research in International Business and Finance, Elsevier, vol. 33(C), pages 304-318.
    7. Abbott, Malcolm & Cohen, Bruce, 2016. "The privatization and de-privatization of rail industry assets in Australia and New Zealand," Utilities Policy, Elsevier, vol. 41(C), pages 48-56.
    8. Onono, Joshua Orungo & Alarcon, Pablo & Karani, Maurice & Muinde, Patrick & Akoko, James Miser & Maud, Carron & Fevre, Eric M. & Häsler, Barbara & Rushton, Jonathan, 2018. "Identification of production challenges and benefits using value chain mapping of egg food systems in Nairobi, Kenya," Agricultural Systems, Elsevier, vol. 159(C), pages 1-8.
    9. Freitas Gomes, Icaro Silvestre & Perez, Yannick & Suomalainen, Emilia, 2020. "Coupling small batteries and PV generation: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).
    10. Domenico Campisi & Simone Gitto & Donato Morea, 2018. "Shari’ah-Compliant Finance: A Possible Novel Paradigm for Green Economy Investments in Italy," Sustainability, MDPI, vol. 10(11), pages 1-12, October.
    11. Zhi Li & Akira Yano & Marco Cossu & Hidekazu Yoshioka & Ichiro Kita & Yasuomi Ibaraki, 2018. "Electrical Energy Producing Greenhouse Shading System with a Semi-Transparent Photovoltaic Blind Based on Micro-Spherical Solar Cells," Energies, MDPI, vol. 11(7), pages 1-23, June.
    12. Stefania Veltri & Giovanni Bronzetti, 2015. "A Critical Analysis of the Intellectual Capital Measuring, Managing, and Reporting Practices in the Non-profit Sector: Lessons Learnt from a Case Study," Journal of Business Ethics, Springer, vol. 131(2), pages 305-318, October.
    13. Le Breton, Michel & Thomas, Alban & Zaporozhets, Vera, 2012. "Bargaining in River Basin Committees: Rules Versus Discretion," LERNA Working Papers 12.12.369, LERNA, University of Toulouse.
    14. Vázquez-Rowe, Ian & Reyna, Janet L. & García-Torres, Samy & Kahhat, Ramzy, 2015. "Is climate change-centrism an optimal policy making strategy to set national electricity mixes?," Applied Energy, Elsevier, vol. 159(C), pages 108-116.
    15. Luca Papi & Andrea F Presbitero & Alberto Zazzaro, 2015. "IMF Lending and Banking Crises," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 63(3), pages 644-691, November.
    16. Griffith, Andrew P. & Haque, Mohua & Epplin, Francis M., 2014. "Cost to produce and deliver cellulosic feedstock to a biorefinery: Switchgrass and forage sorghum," Applied Energy, Elsevier, vol. 127(C), pages 44-54.
    17. Sonja Simon & Tobias Naegler & Hans Christian Gils, 2018. "Transformation towards a Renewable Energy System in Brazil and Mexico—Technological and Structural Options for Latin America," Energies, MDPI, vol. 11(4), pages 1-26, April.
    18. Aloui, Chaker & Hamida, Hela ben, 2014. "Modelling and forecasting value at risk and expected shortfall for GCC stock markets: Do long memory, structural breaks, asymmetry, and fat-tails matter?," The North American Journal of Economics and Finance, Elsevier, vol. 29(C), pages 349-380.
    19. Jaber, J.O. & Elkarmi, Fawwaz & Alasis, Emil & Kostas, Anagnostopoulos, 2015. "Employment of renewable energy in Jordan: Current status, SWOT and problem analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 490-499.
    20. Lührmann, Melanie & Serra-Garcia, Marta & Winter, Joachim, 2015. "Teaching teenagers in finance: Does it work?," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 160-174.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:8:y:2015:i:11:p:12350-12880:d:58716. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.