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The economic viability of photovoltaic systems in public buildings: Evidence from Italy

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  • D’Adamo, Idiano
  • Falcone, Pasquale Marcello
  • Gastaldi, Massimo
  • Morone, Piergiuseppe

Abstract

Photovoltaic (PV) systems transform solar irradiation into electricity, thereby substituting for traditional energy sources and reducing environmental pollution. The present work evaluates a developed market (Italy) in which subsidies have been re-introduced for PV plants with a nominal capacity above 20 kW through the FER1 (renewable energy sources) Decree. The discounted cash flow (DCF) methodology is applied to several cases of PV plants in public buildings, in order to determine the value of several critical variables (i.e. level of insolation, plant size, share of self-consumption, investment cost, electricity purchase price). In particular, differences in net present value (NPV) and discounted payback time (DPBT) between subsidy and no-subsidy scenarios are quantified. Break-even point (BEP) analysis is used to define the share of self-consumed energy for which NPV is positive. This share is found to range from 9 to 28% in 105 kW plants and from 10 to 35% in 25 kW plants. In addition, the results verify profitability in almost all of the baseline case studies and only half of the alternative scenarios (involving no subsidies). The estimated profits are consistent with investments aimed at increasing the share of self-consumed energy.

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  • D’Adamo, Idiano & Falcone, Pasquale Marcello & Gastaldi, Massimo & Morone, Piergiuseppe, 2020. "The economic viability of photovoltaic systems in public buildings: Evidence from Italy," Energy, Elsevier, vol. 207(C).
    • Handle: RePEc:eee:energy:v:207:y:2020:i:c:s0360544220314237
    DOI: 10.1016/j.energy.2020.118316
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    1. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2020. "The post COVID-19 green recovery in practice: Assessing the profitability of a policy proposal on residential photovoltaic plants," Energy Policy, Elsevier, vol. 147(C).
    2. Bongsuk Sung & Woo-Yong Song, 2021. "Are Political Factors More Relevant Than Economic Factors in Firm-Level Renewable Energy Technology Export? Evidence from Path Analysis," Sustainability, MDPI, vol. 13(16), pages 1-16, August.
    3. Ming Fang & Chiu-Lan Chang, 2022. "Nexus between fiscal imbalances, green fiscal spending, and green economic growth: empirical findings from E-7 economies," Economic Change and Restructuring, Springer, vol. 55(4), pages 2423-2443, November.
    4. Shali Wang & Jiaxi Wu & Yunan Peng & Jane Xu & Lisa Leinonen & Yuyu Wang & Zheng Meng, 2022. "Influence of Residential Photovoltaic Promotion Policy on Installation Intention in Typical Regions of China," Sustainability, MDPI, vol. 14(14), pages 1-30, July.
    5. Dhanasingh Sivalinga Vijayan & Eugeniusz Koda & Arvindan Sivasuriyan & Jan Winkler & Parthiban Devarajan & Ramamoorthy Sanjay Kumar & Aleksandra Jakimiuk & Piotr Osinski & Anna Podlasek & Magdalena Da, 2023. "Advancements in Solar Panel Technology in Civil Engineering for Revolutionizing Renewable Energy Solutions—A Review," Energies, MDPI, vol. 16(18), pages 1-33, September.
    6. Abraham Alem Kebede & Maitane Berecibar & Thierry Coosemans & Maarten Messagie & Towfik Jemal & Henok Ayele Behabtu & Joeri Van Mierlo, 2020. "A Techno-Economic Optimization and Performance Assessment of a 10 kW P Photovoltaic Grid-Connected System," Sustainability, MDPI, vol. 12(18), pages 1-29, September.
    7. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2022. "Solar collective self-consumption: Economic analysis of a policy mix," Ecological Economics, Elsevier, vol. 199(C).
    8. Hengtian Wang & Xiaolong Yang & Xinxin Xu & Liu Fei, 2021. "Exploring Opportunities and Challenges of Solar PV Power under Carbon Peak Scenario in China: A PEST Analysis," Energies, MDPI, vol. 14(11), pages 1-28, May.
    9. Antonella Meneghetti & Chiara Pagnin & Patrizia Simeoni, 2021. "Decarbonizing the Cold Chain: Long-Haul Refrigerated Deliveries with On-Board Photovoltaic Energy Integration," Sustainability, MDPI, vol. 13(15), pages 1-19, July.
    10. Bing Wang & Qiran Cai & Zhenming Sun, 2020. "Determinants of Willingness to Participate in Urban Incentive-Based Energy Demand-Side Response: An Empirical Micro-Data Analysis," Sustainability, MDPI, vol. 12(19), pages 1-18, September.
    11. Wim Van Opstal & Anse Smeets, 2022. "Market-Specific Barriers and Enablers for Organizational Investments in Solar PV—Lessons from Flanders," Sustainability, MDPI, vol. 14(20), pages 1-26, October.
    12. Ivo Araújo & Leonel J. R. Nunes & David Patíño Vilas & António Curado, 2022. "Photovoltaic Production Management in a Hall of Residence with High Energy Consumption," Energies, MDPI, vol. 15(22), pages 1-18, November.
    13. Ángel José Ordóñez Mendieta & Esteban Sánchez Hernández, 2021. "Analysis of PV Self-Consumption in Educational and Office Buildings in Spain," Sustainability, MDPI, vol. 13(4), pages 1-16, February.
    14. Idiano D’Adamo & Massimo Gastaldi & Piergiuseppe Morone, 2020. "Dataset for Assessing the Economic Performance of a Residential PV Plant: The Analysis of a New Policy Proposal," Data, MDPI, vol. 5(4), pages 1-5, October.
    15. Seepana Praveenkumar & Aminjon Gulakhmadov & Abhinav Kumar & Murodbek Safaraliev & Xi Chen, 2022. "Comparative Analysis for a Solar Tracking Mechanism of Solar PV in Five Different Climatic Locations in South Indian States: A Techno-Economic Feasibility," Sustainability, MDPI, vol. 14(19), pages 1-22, September.
    16. Andreolli, Francesca & D’Alpaos, Chiara & Moretto, Michele, 2022. "Valuing investments in domestic PV-Battery Systems under uncertainty," Energy Economics, Elsevier, vol. 106(C).
    17. Luo, Shunjun & Zhang, Shaohui, 2022. "How R&D expenditure intermediate as a new determinants for low carbon energy transition in Belt and Road Initiative economies," Renewable Energy, Elsevier, vol. 197(C), pages 101-109.
    18. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2022. "The impact of a subsidized tax deduction on residential solar photovoltaic-battery energy storage systems," Utilities Policy, Elsevier, vol. 75(C).

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