IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v119y2018icp354-364.html
   My bibliography  Save this article

Economic evaluation of grid–connected photovoltaic systems viability under a new dynamic feed–in tariff scheme: A case study in Iran

Author

Listed:
  • Bakhshi, Reza
  • Sadeh, Javad

Abstract

Grid–connected photovoltaic (GCPV) systems are currently known as a top leading source of energy among all distributed generators. Despite numerous benefits, this technology suffers from the high initial burden cost. Hence, governments have been decided to encourage the investors to install GCPV systems through different support mechanisms such as feed–in tariff (FIT). This paper investigates the viability of GCPV technology under a new dynamic FIT strategy. The new scheme introduces the annual update of the FIT regarding the goods retail prices and Euro exchange rate rather than the retail electricity cost. These objects are two parameters mostly affect the justification of a project in developing countries with predominantly imported equipment and unstable economic conditions. The new policy is described, and the economic perspective is cleared by computing the economic indices, including net present value (NPV), internal rate of return (IRR), and payback period time (PBT) as well as the levelized cost of energy (LCOE) for Iran as a case study. The computed outputs and significant rise in the installed capacity rate after running the proposed scheme, remark the technology viability for short and mid–term courses in the country. The outputs demonstrate proper attractiveness of the power stations for foreign investment probably does not benefit from excess FIT regarding the utilization of foreign PV module. Finally, it has been concluded that this program can be implemented in developing countries, especially in the Middle East region with almost similar climate patterns.

Suggested Citation

  • Bakhshi, Reza & Sadeh, Javad, 2018. "Economic evaluation of grid–connected photovoltaic systems viability under a new dynamic feed–in tariff scheme: A case study in Iran," Renewable Energy, Elsevier, vol. 119(C), pages 354-364.
    • Handle: RePEc:eee:renene:v:119:y:2018:i:c:p:354-364
    DOI: 10.1016/j.renene.2017.11.093
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148117311941
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2017.11.093?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Harder, Elizabeth & Gibson, Jacqueline MacDonald, 2011. "The costs and benefits of large-scale solar photovoltaic power production in Abu Dhabi, United Arab Emirates," Renewable Energy, Elsevier, vol. 36(2), pages 789-796.
    2. Reichelstein, Stefan & Yorston, Michael, 2013. "The prospects for cost competitive solar PV power," Energy Policy, Elsevier, vol. 55(C), pages 117-127.
    3. Swift, Kenton D., 2013. "A comparison of the cost and financial returns for solar photovoltaic systems installed by businesses in different locations across the United States," Renewable Energy, Elsevier, vol. 57(C), pages 137-143.
    4. Abolhosseini, Shahrouz & Heshmati, Almas, 2014. "The main support mechanisms to finance renewable energy development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 876-885.
    5. Ouyang, Xiaoling & Lin, Boqiang, 2014. "Levelized cost of electricity (LCOE) of renewable energies and required subsidies in China," Energy Policy, Elsevier, vol. 70(C), pages 64-73.
    6. Tsilingiridis, G. & Ikonomopoulos, A., 2013. "First results of incentives policy on grid interconnected photovoltaic systems development in Greece," Energy Policy, Elsevier, vol. 58(C), pages 303-311.
    7. Rampinelli, G.A. & Krenzinger, A. & Chenlo Romero, F., 2014. "Mathematical models for efficiency of inverters used in grid connected photovoltaic systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 578-587.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ding, Liping & Zhang, Zumeng & Dai, Qiyao & Zhu, Yuxuan & Shi, Yin, 2023. "Alternative operational modes for Chinese PV poverty alleviation power stations: Economic impacts on stakeholders," Utilities Policy, Elsevier, vol. 82(C).
    2. Ferdinando Chiacchio & Fabio Famoso & Diego D’Urso & Luca Cedola, 2019. "Performance and Economic Assessment of a Grid-Connected Photovoltaic Power Plant with a Storage System: A Comparison between the North and the South of Italy," Energies, MDPI, vol. 12(12), pages 1-25, June.
    3. Wang, Yue & Das, Ridoy & Putrus, Ghanim & Kotter, Richard, 2020. "Economic evaluation of photovoltaic and energy storage technologies for future domestic energy systems – A case study of the UK," Energy, Elsevier, vol. 203(C).
    4. Milad Mousavian, H. & Hamed Shakouri, G. & Mashayekhi, Ali-Naghi & Kazemi, Aliyeh, 2020. "Does the short-term boost of renewable energies guarantee their stable long-term growth? Assessment of the dynamics of feed-in tariff policy," Renewable Energy, Elsevier, vol. 159(C), pages 1252-1268.
    5. Xu, Zhitao & Elomri, Adel & Al-Ansari, Tareq & Kerbache, Laoucine & El Mekkawy, Tarek, 2022. "Decisions on design and planning of solar-assisted hydroponic farms under various subsidy schemes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    6. Yunqi Zhao & Jing Xiang & Jiaming Xu & Jinying Li & Ning Zhang, 2019. "Study on the Comprehensive Benefit Evaluation of Transnational Power Networking Projects Based on Multi-Project Stakeholder Perspectives," Energies, MDPI, vol. 12(2), pages 1-21, January.
    7. Cristea, Ciprian & Cristea, Maria & Birou, Iulian & Tîrnovan, Radu-Adrian, 2020. "Economic assessment of grid-connected residential solar photovoltaic systems introduced under Romania’s new regulation," Renewable Energy, Elsevier, vol. 162(C), pages 13-29.
    8. Duman, A. Can & Güler, Önder, 2020. "Economic analysis of grid-connected residential rooftop PV systems in Turkey," Renewable Energy, Elsevier, vol. 148(C), pages 697-711.
    9. José de Castro Vieira, Samuel & Tapia Carpio, Lucio Guido, 2020. "The economic impact on residential fees associated with the expansion of grid-connected solar photovoltaic generators in Brazil," Renewable Energy, Elsevier, vol. 159(C), pages 1084-1098.
    10. Lu, Yuehong & Zhang, Xiao-Ping & Huang, Zhijia & Lu, Jinli & Wang, Dong, 2019. "Impact of introducing penalty-cost on optimal design of renewable energy systems for net zero energy buildings," Applied Energy, Elsevier, vol. 235(C), pages 106-116.
    11. Hosseini-Motlagh, Seyyed-Mahdi & Samani, Mohammad Reza Ghatreh & Shahbazbegian, Vahid, 2020. "Innovative strategy to design a mixed resilient-sustainable electricity supply chain network under uncertainty," Applied Energy, Elsevier, vol. 280(C).
    12. Mulleriyawage, U.G.K. & Shen, W.X., 2021. "Impact of demand side management on optimal sizing of residential battery energy storage system," Renewable Energy, Elsevier, vol. 172(C), pages 1250-1266.
    13. Vaziri Rad, Mohammad Amin & Toopshekan, Ashkan & Rahdan, Parisa & Kasaeian, Alibakhsh & Mahian, Omid, 2020. "A comprehensive study of techno-economic and environmental features of different solar tracking systems for residential photovoltaic installations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 129(C).
    14. Razmi, Seyedeh Fatemeh & Moghadam, Marjan Heirani & Behname, Mehdi, 2021. "Time-varying effects of monetary policy on Iranian renewable energy generation," Renewable Energy, Elsevier, vol. 177(C), pages 1161-1169.
    15. Yuehong Lu & Zafar A. Khan & Manuel S. Alvarez-Alvarado & Yang Zhang & Zhijia Huang & Muhammad Imran, 2020. "A Critical Review of Sustainable Energy Policies for the Promotion of Renewable Energy Sources," Sustainability, MDPI, vol. 12(12), pages 1-31, June.
    16. Mehran Dehghan & Carlos F. Pfeiffer & Elyas Rakhshani & Reza Bakhshi-Jafarabadi, 2021. "A Review on Techno-Economic Assessment of Solar Water Heating Systems in the Middle East," Energies, MDPI, vol. 14(16), pages 1-28, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aquila, Giancarlo & Coelho, Eden de Oliveira Pinto & Bonatto, Benedito Donizeti & Pamplona, Edson de Oliveira & Nakamura, Wilson Toshiro, 2021. "Perspective of uncertainty and risk from the CVaR-LCOE approach: An analysis of the case of PV microgeneration in Minas Gerais, Brazil," Energy, Elsevier, vol. 226(C).
    2. Lee, Minhyun & Hong, Taehoon & Koo, Choongwan, 2016. "An economic impact analysis of state solar incentives for improving financial performance of residential solar photovoltaic systems in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 590-607.
    3. Jägemann, Cosima & Hagspiel, Simeon & Lindenberger, Dietmar, 2013. "The Economic Inefficiency of Grid Parity: The Case of German Photovoltaics," EWI Working Papers 2013-19, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    4. Jia, Teng & Dai, Yanjun & Wang, Ruzhu, 2018. "Refining energy sources in winemaking industry by using solar energy as alternatives for fossil fuels: A review and perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 88(C), pages 278-296.
    5. Lai, Chun Sing & McCulloch, Malcolm D., 2017. "Levelized cost of electricity for solar photovoltaic and electrical energy storage," Applied Energy, Elsevier, vol. 190(C), pages 191-203.
    6. Yuan, Jiahai & Sun, Shenghui & Zhang, Wenhua & Xiong, Minpeng, 2014. "The economy of distributed PV in China," Energy, Elsevier, vol. 78(C), pages 939-949.
    7. MacDougall, Hillary & Tomosk, Steve & Wright, David, 2018. "Geographic maps of the impact of government incentives on the economic viability of solar power," Renewable Energy, Elsevier, vol. 122(C), pages 497-506.
    8. Stetter, Chris & Piel, Jan-Hendrik & Hamann, Julian F.H. & Breitner, Michael H., 2020. "Competitive and risk-adequate auction bids for onshore wind projects in Germany," Energy Economics, Elsevier, vol. 90(C).
    9. Xin-gang, Zhao & Yi-min, Xie, 2019. "The economic performance of industrial and commercial rooftop photovoltaic in China," Energy, Elsevier, vol. 187(C).
    10. Tao, Jacqueline Yujia & Finenko, Anton, 2016. "Moving beyond LCOE: impact of various financing methods on PV profitability for SIDS," Energy Policy, Elsevier, vol. 98(C), pages 749-758.
    11. Zheng Lu & Yunfei Chen & Qiaoqiao Fan, 2021. "Study on Feasibility of Photovoltaic Power to Grid Parity in China Based on LCOE," Sustainability, MDPI, vol. 13(22), pages 1-14, November.
    12. Armendariz-Lopez, J.F. & Luna-Leon, A. & Gonzalez-Trevizo, M.E. & Arena-Granados, A.P. & Bojorquez-Morales, G., 2016. "Life cycle cost of photovoltaic technologies in commercial buildings in Baja California, Mexico," Renewable Energy, Elsevier, vol. 87(P1), pages 564-571.
    13. Zou, Hongyang & Du, Huibin & Brown, Marilyn A. & Mao, Guozhu, 2017. "Large-scale PV power generation in China: A grid parity and techno-economic analysis," Energy, Elsevier, vol. 134(C), pages 256-268.
    14. Tu, Qiang & Mo, Jianlei & Betz, Regina & Cui, Lianbiao & Fan, Ying & Liu, Yu, 2020. "Achieving grid parity of solar PV power in China- The role of Tradable Green Certificate," Energy Policy, Elsevier, vol. 144(C).
    15. Sommerfeldt, Nelson & Madani, Hatef, 2017. "Revisiting the techno-economic analysis process for building-mounted, grid-connected solar photovoltaic systems: Part one – Review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1379-1393.
    16. Bustos, F. & Toledo, A. & Contreras, J. & Fuentes, A., 2016. "Sensitivity analysis of a photovoltaic solar plant in Chile," Renewable Energy, Elsevier, vol. 87(P1), pages 145-153.
    17. Marcos García-López & Borja Montano & Joaquín Melgarejo, 2023. "The Influence of Photovoltaic Self-Consumption on Water Treatment Energy Costs: The Case of the Region of Valencia," Sustainability, MDPI, vol. 15(15), pages 1-21, July.
    18. Acaroğlu, Hakan & Baykul, M. Celalettin, 2016. "Economic analysis of flat-plate solar collectors (FPSCs): A solution to the unemployment problem in the city of Eskisehir," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 607-617.
    19. Gunther Friedl & Stefan Reichelstein & Amadeus Bach & Maximilian Blaschke & Lukas Kemmer, 2023. "Applications of the levelized cost concept," Journal of Business Economics, Springer, vol. 93(6), pages 1125-1148, August.
    20. Okoroigwe, Edmund & Madhlopa, Amos, 2016. "An integrated combined cycle system driven by a solar tower: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 337-350.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:119:y:2018:i:c:p:354-364. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.