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Financial Analysis of Solar Rooftop PV System: Case Study in Indonesia

Author

Listed:
  • Elieser Tarigan

    (Department of Electrical Engineering, Center for Environment and Renewable Energy Studies (PuSLET), University of Surabaya, Indonesia.)

Abstract

The primary barrier to the dissemination of photovoltaic (PV) technology is its high cost as compared to other alternative options. This paper discusses some financial aspects of rooftop PV systems: module cost, BOS cost, useful lifetime, minimum attractive rate of return, and O&M cost. An equation and numerical calculation were made for estimating the unit cost of electricity of a rooftop system. The numerical calculation and simulation were made by taking the condition of Indonesia as the case study. It was assumed that (i) the useful lifetime of the PV system is 20 years, (ii) the annual maintenance cost is two percent of the total capital cost of the system, (iii) taxes and insurance costs are not to be paid, and (iv) capacity utilization is 20 percent. It is found that rooftop PV systems have the potential to provide power at competitive prices for residential with other alternative options for power generation.

Suggested Citation

  • Elieser Tarigan, 2023. "Financial Analysis of Solar Rooftop PV System: Case Study in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 15-19, May.
    • Handle: RePEc:eco:journ2:2023-03-3
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    References listed on IDEAS

    as
    1. Muhammad Yasir Ali Khan & Haoming Liu & Zhihao Yang & Xiaoling Yuan, 2020. "A Comprehensive Review on Grid Connected Photovoltaic Inverters, Their Modulation Techniques, and Control Strategies," Energies, MDPI, vol. 13(16), pages 1-40, August.
    2. Khezri, Rahmat & Mahmoudi, Amin & Aki, Hirohisa, 2022. "Optimal planning of solar photovoltaic and battery storage systems for grid-connected residential sector: Review, challenges and new perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    3. Maulidia, Martha & Dargusch, Paul & Ashworth, Peta & Ardiansyah, Fitrian, 2019. "Rethinking renewable energy targets and electricity sector reform in Indonesia: A private sector perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 101(C), pages 231-247.
    4. Elieser Tarigan, 2020. "Rooftop PV System Policy and Implementation Study for a Household in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 110-115.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    PV system; financial; rooftop; electricity; unit cost;
    All these keywords.

    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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