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Economic feasibility of floating photovoltaic power plants: Profitability and competitiveness

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  • Micheli, Leonardo
  • Talavera, Diego L.

Abstract

Floating photovoltaics is a solution that is getting significant attention worldwide. It consists of installing photovoltaic modules on water basins. This contributes to alleviating the land occupancy issue associated with the growing deployment of photovoltaics. However, because of the early stage of deployment, the costs of floating systems are still higher than traditional land-based photovoltaics. Nonetheless, in some cases, the installation of floating photovoltaics might occur independently of the cost competition with the in-land technology. In this light, the current work presents an analysis of the profitability and cost competitiveness of floating photovoltaics in Europe. The Levelized Cost of Electricity of floating photovoltaics is found to be generally higher than onshore wind and land-based photovoltaics, but lower than fossil gas. Furthermore, floating photovoltaics is found to be a profitable investment in countries with low capital costs, high energy yields and/or high market price of electricity. In these countries, the internal rate of return is typically higher than the weighted average cost of capital, confirming the profitability of the investigated solution. Last, the economic parameters are found to influence the economic viability of FPV more than the energy related factors such as the tilt angle or the heat transfer.

Suggested Citation

  • Micheli, Leonardo & Talavera, Diego L., 2023. "Economic feasibility of floating photovoltaic power plants: Profitability and competitiveness," Renewable Energy, Elsevier, vol. 211(C), pages 607-616.
    • Handle: RePEc:eee:renene:v:211:y:2023:i:c:p:607-616
    DOI: 10.1016/j.renene.2023.05.011
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    References listed on IDEAS

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    1. Talavera, D.L. & Muñoz-Cerón, Emilio & Ferrer-Rodríguez, J.P. & Pérez-Higueras, Pedro J., 2019. "Assessment of cost-competitiveness and profitability of fixed and tracking photovoltaic systems: The case of five specific sites," Renewable Energy, Elsevier, vol. 134(C), pages 902-913.
    2. Cromratie Clemons, Sáde K. & Salloum, Coleman R. & Herdegen, Kyle G. & Kamens, Richard M. & Gheewala, Shabbir H., 2021. "Life cycle assessment of a floating photovoltaic system and feasibility for application in Thailand," Renewable Energy, Elsevier, vol. 168(C), pages 448-462.
    3. Kougias, Ioannis & Taylor, Nigel & Kakoulaki, Georgia & Jäger-Waldau, Arnulf, 2021. "The role of photovoltaics for the European Green Deal and the recovery plan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    4. Capellán-Pérez, Iñigo & de Castro, Carlos & Arto, Iñaki, 2017. "Assessing vulnerabilities and limits in the transition to renewable energies: Land requirements under 100% solar energy scenarios," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 760-782.
    5. Talavera, D.L. & Pérez-Higueras, P. & Ruíz-Arias, J.A. & Fernández, E.F., 2015. "Levelised cost of electricity in high concentrated photovoltaic grid connected systems: Spatial analysis of Spain," Applied Energy, Elsevier, vol. 151(C), pages 49-59.
    6. Boduch, Andrzej & Mik, Krzysztof & Castro, Rui & Zawadzki, Paweł, 2022. "Technical and economic assessment of a 1 MWp floating photovoltaic system in Polish conditions," Renewable Energy, Elsevier, vol. 196(C), pages 983-994.
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    Cited by:

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