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Arno Smets, Nishant Narayan
PV Systems - Applications and Design Economics of PV Systems Week - - PowerPoint PPT Presentation
PV Systems - Applications and Design Economics of PV Systems Week - - PowerPoint PPT Presentation
PV Systems - Applications and Design Economics of PV Systems Week 8.3 Arno Smets, Nishant Narayan Payback period Investment cost Returns Investment cost Payback period = Returns/year Example Payback period Installation 4000 1 kW p
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Payback period
Investment cost Payback period = Returns/year
Investment cost Returns
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Example – Payback period
Installation 4000 € 1 kWp Consumption 2000 €/year PV electricity 800 €/year
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Example – Payback period
Costs (€) Time (years)
4,000 8,000 2 4 6 8 10
Investment Returns
800 €/year
5 years
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Insolation Electricity cost PV system cost
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Feed-in tariff
Gross feed-in tariff Net feed-in tariff
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Levelized cost of electricity (LCOE)
50 100 150 200 250 300 EstimatedLCOE ($/MWh) Transmision Investment Variable O&M Levelized Capital Cost Fixed O&M
Source: Energy Information Administration
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Levelized cost of electricity (LCOE)
1 1
1 1
N t t t N t t t
A I i LCOE E i
At = Total annual cost in year t I0 = Initial investment Et = Annual energy yield r = Discount rate
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Grid parity
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Grid parity
Typical sites Best sites
Solar Power Prices Volume of PV systems installed
Grid power prices Wholesale
Grid parity when lines cross
Earliest Latest
Source: Practical Handbook of Photovoltaics
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