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The Challenges for Social and Economic Policy Related to the Energy Transformation - Analysis of Profitability and Minimizing the Risk of Deciding to Invest in a Home Micro-Installation

Author

Listed:
  • Mariusz Niekurzak
  • Wojciech Lewicki
  • Agnieszka Brelik

Abstract

Purpose: The aim of the article is to analyze the profitability and minimize the risk of making a decision in the investment of a home PV micro-installation. Particular emphasis was placed on the determinants of the boundary conditions at which there is an investment and economic justification for potential investors to make business decisions in the implementation of the project of electricity production for their own needs. Approach/Methodology/Design: The research was carried out using the NPV - Net Present Value of Investment and IRR - Internal rate of Return methods. These methods allowed the authors to calculate the market value of investments with the assumed boundary criteria and to determine the economic efficiency of the investment. The research was carried out in April-March 2021-2022 on a test PV installation in a household. Findings: Installing a photovoltaic system in your household brings many benefits. It should be noted that each kWh produced in a PV installation makes the investor independent of the grid distributor, reduces the consumption of energy from conventional sources, minimizes the emission of pollutants into the atmosphere and favors economic development. In addition, investment in such installations allows for obtaining income from the sale of surplus energy produced. Practical implications: The presented models have shown that the project for their implementation is fully economically justified and will allow investors to make a rational investment decision. These models can be effectively used in other countries, and can also be a starting point for a discussion on the direction of energy development. Originality/Value: Obtaining this data allowed the authors to indicate the directions of improvements that may contribute to obtaining a more reliable assessment of the profitability of the tested installations.

Suggested Citation

  • Mariusz Niekurzak & Wojciech Lewicki & Agnieszka Brelik, 2022. "The Challenges for Social and Economic Policy Related to the Energy Transformation - Analysis of Profitability and Minimizing the Risk of Deciding to Invest in a Home Micro-Installation," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 144-159.
    • Handle: RePEc:ers:journl:v:xxv:y:2022:i:4:p:144-159
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    References listed on IDEAS

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    4. Mariusz Niekurzak, 2021. "The Potential of Using Renewable Energy Sources in Poland Taking into Account the Economic and Ecological Conditions," Energies, MDPI, vol. 14(22), pages 1-17, November.
    5. Pablo Benalcazar & Adam Suski & Jacek Kamiński, 2020. "The Effects of Capital and Energy Subsidies on the Optimal Design of Microgrid Systems," Energies, MDPI, vol. 13(4), pages 1-23, February.
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    More about this item

    Keywords

    Profitability account; economic analysis; energy analysis; renewable energy sources; photovoltaic panels.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • O29 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Other
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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