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Technical and Financial Analysis for the Implementation of Small-scale Self-generation Projects, based on Grid-Tied Photovoltaic Solar Energy, for Residential Users under Colombian Regulations

Author

Listed:
  • Yecid Muñoz

    (Facultad de Ingeniería, Universidad Autónoma de Bucaramanga, Bucaramanga, Colombia)

  • Ciro Alfonso Suarez

    (Facultad de Ingeniería, Universidad Autónoma de Bucaramanga, Bucaramanga, Colombia)

  • Adalberto Ospino Castro

    (Departamento de Energía, Universidad de la Costa, Barranquilla, Colombia)

  • Omar Julián López

    (Facultad de Ingeniería, Universidad Autónoma de Bucaramanga, Bucaramanga, Colombia)

Abstract

The study focuses on integrating non-conventional renewable energy sources into Colombia's power system. The regulatory framework allows small prosumers to trade energy surpluses with grid operators. The research analyzes the financial feasibility of implementing photovoltaic systems for residential users. Technical aspects governing energy production and implementation costs are examined. Colombian residential users, divided into six socioeconomic strata, undergo individual analysis based on their energy rates and consumption patterns. The study area is Bucaramanga, known for intermediate solar potential. Precise cost estimates for implementing photovoltaic systems that meet user energy requirements are provided. Financial viability indicators (NPV, IRR, Payback Time) are evaluated for three scenarios: existing energy prices, 50% government financing, and a 10% tariff reduction due to government intervention. Results show financial viability for strata 4, 5, and 6, but not for strata 1, 2, and 3. Government intervention can make strata 2 and 3 feasible. Lowering the kWh price adversely impacts the project's financial feasibility for all strata, particularly the lower-income ones. The study is valuable for potential investors and policymakers seeking to promote photovoltaic systems in the residential sector. It provides insights into economic viability and helps develop effective policies for Colombia's sustainable energy transition.

Suggested Citation

  • Yecid Muñoz & Ciro Alfonso Suarez & Adalberto Ospino Castro & Omar Julián López, 2024. "Technical and Financial Analysis for the Implementation of Small-scale Self-generation Projects, based on Grid-Tied Photovoltaic Solar Energy, for Residential Users under Colombian Regulations," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 197-205, March.
    • Handle: RePEc:eco:journ2:2024-02-19
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    References listed on IDEAS

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    1. Bórawski, Piotr & Holden, Lisa & Bełdycka-Bórawska, Aneta, 2023. "Perspectives of photovoltaic energy market development in the european union," Energy, Elsevier, vol. 270(C).
    2. Chien, Fengsheng & Hsu, Ching-Chi & Ozturk, Ilhan & Sharif, Arshian & Sadiq, Muhammad, 2022. "The role of renewable energy and urbanization towards greenhouse gas emission in top Asian countries: Evidence from advance panel estimations," Renewable Energy, Elsevier, vol. 186(C), pages 207-216.
    3. Muhammad Mateen Afzal Awan & Aamer Bilal Asghar & Muhammad Yaqoob Javed & Zsolt Conka, 2023. "Ordering Technique for the Maximum Power Point Tracking of an Islanded Solar Photovoltaic System," Sustainability, MDPI, vol. 15(4), pages 1-19, February.
    4. Garces, Estefany & Franco, Carlos J. & Tomei, Julia & Dyner, Isaac, 2023. "Sustainable electricity supply for small off-grid communities in Colombia: A system dynamics approach," Energy Policy, Elsevier, vol. 172(C).
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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