IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v28y2013icp531-540.html
   My bibliography  Save this article

Economic analysis of investment in the rooftop photovoltaic systems: A long-term research in the two main markets

Author

Listed:
  • Spertino, Filippo
  • Di Leo, Paolo
  • Cocina, Valeria

Abstract

Nowadays, due to incentive policies, the PhotoVoltaic (PV) installations become an economically attractive investment. The different policies aim to reduce the PV installation costs, consequently to the deployment of the market. In recent years, a progressive price decrease of components for PV installations has occurred, according their learning curve: every doubling of the volume implies approximately a cost reduction of −20%. In order to reduce the burden of the incentive rate on the national budget, maintaining the economic margin of the investment attractive for investors, a progressive tariff decline has also taken place. This paper provides a technical-economic analysis of investments in PV systems installed on the rooftop, considering incentive policies, and applies it to some significant case studies in the Countries, in which PV market is the most prosperous (Germany and Italy). The analysis puts into evidence the past and current economic margins of the PV investments since 2006 to 2012. Four case studies from 3kWp to 1MWp are examined in detail. The profitability indexes in terms of net present value and internal rate of return, evaluated throughout incentive duration of 20 years, become very interesting above all in Italy (higher than 100% of the installation cost and higher than 10%, respectively) since 2009, when an abrupt decrement in installation cost occurred. In Italy the best profit margins occur for large-size PV plants and are poorly counterbalanced by the decline of the feed-in tariff up to 2012, when a new framework has given a knock to the investments, whereas in Germany the best margins happen for medium-size PV plants and are well adjusted by the feed-in tariff. However, it is predictable that a cut in German feed-in tariff will take place, because the profit margins have been higher in last year than in the previous years.

Suggested Citation

  • Spertino, Filippo & Di Leo, Paolo & Cocina, Valeria, 2013. "Economic analysis of investment in the rooftop photovoltaic systems: A long-term research in the two main markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 28(C), pages 531-540.
    • Handle: RePEc:eee:rensus:v:28:y:2013:i:c:p:531-540
    DOI: 10.1016/j.rser.2013.08.024
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032113005649
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2013.08.024?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. Arnoldo C. Hax & Nicolas S. Majluf, 1982. "Competitive Cost Dynamics: The Experience Curve," Interfaces, INFORMS, vol. 12(5), pages 50-61, October.
    2. Kaldellis, J. K. & Vlachou, D. S. & Korbakis, G., 2005. "Techno-economic evaluation of small hydro power plants in Greece: a complete sensitivity analysis," Energy Policy, Elsevier, vol. 33(15), pages 1969-1985, October.
    3. Danchev, Svetoslav & Maniatis, George & Tsakanikas, Aggelos, 2010. "Returns on investment in electricity producing photovoltaic systems under de-escalating feed-in tariffs: The case of Greece," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 500-505, January.
    4. Focacci, Antonio, 2009. "Residential plants investment appraisal subsequent to the new supporting photovoltaic economic mechanism in Italy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(9), pages 2710-2715, December.
    5. Anonymous, 2012. "In Remembrance: Girish Sant, Energy Expert, Activist," Working Papers id:4797, eSocialSciences.
    6. Talavera, D.L. & Nofuentes, G. & Aguilera, J., 2010. "The internal rate of return of photovoltaic grid-connected systems: A comprehensive sensitivity analysis," Renewable Energy, Elsevier, vol. 35(1), pages 101-111.
    7. Grau, Thilo & Huo, Molin & Neuhoff, Karsten, 2012. "Survey of photovoltaic industry and policy in Germany and China," Energy Policy, Elsevier, vol. 51(C), pages 20-37.
    8. Abejon Aparicio, Noe & Lai, Cynthia & Chan-Halbrendt, Catherine, 2012. "“DOSSA”, highway to energy self-sustainability," Applied Energy, Elsevier, vol. 97(C), pages 217-224.
    Full references (including those not matched with items on IDEAS)

    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. Talavera, D.L. & Muñoz-Cerón, E. & de la Casa, J. & Ortega, M.J. & Almonacid, G., 2011. "Energy and economic analysis for large-scale integration of small photovoltaic systems in buildings: The case of a public location in Southern Spain," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4310-4319.
    2. Chun-Nan Chen & Chun-Ting Yang, 2021. "The Investability of PV Systems under Descending Feed-In Tariffs: Taiwan Case," Energies, MDPI, vol. 14(9), pages 1-13, May.
    3. 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.
    4. Talavera, D.L. & Pérez-Higueras, P. & Almonacid, F. & Fernández, E.F., 2017. "A worldwide assessment of economic feasibility of HCPV power plants: Profitability and competitiveness," Energy, Elsevier, vol. 119(C), pages 408-424.
    5. Kërçi, Taulant & Tzounas, Georgios & Milano, Federico, 2022. "A dynamic behavioral model of the long-term development of solar photovoltaic generation driven by feed-in tariffs," Energy, Elsevier, vol. 256(C).
    6. Oliver O. Apeh & Edson L. Meyer & Ochuko K. Overen, 2022. "Contributions of Solar Photovoltaic Systems to Environmental and Socioeconomic Aspects of National Development—A Review," Energies, MDPI, vol. 15(16), pages 1-28, August.
    7. Riccardo Squatrito & Filippo Sgroi & Salvatore Tudisca & Anna Maria Di Trapani & Riccardo Testa, 2014. "Post Feed-in Scheme Photovoltaic System Feasibility Evaluation in Italy: Sicilian Case Studies," Energies, MDPI, vol. 7(11), pages 1-19, November.
    8. Burtt, D. & Dargusch, P., 2015. "The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions," Applied Energy, Elsevier, vol. 148(C), pages 439-448.
    9. Fernández-Blanco, R. & Kavvadias, K. & Hidalgo González, I., 2017. "Quantifying the water-power linkage on hydrothermal power systems: A Greek case study," Applied Energy, Elsevier, vol. 203(C), pages 240-253.
    10. Yi, Choong-Sung & Lee, Jin-Hee & Shim, Myung-Pil, 2010. "Site location analysis for small hydropower using geo-spatial information system," Renewable Energy, Elsevier, vol. 35(4), pages 852-861.
    11. -, 2023. "Foreign Direct Investment in Latin America and the Caribbean 2023," La Inversión Extranjera Directa en América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 48979 edited by Eclac, September.
    12. Ewa Chomać-Pierzecka & Andrzej Kokiel & Joanna Rogozińska-Mitrut & Anna Sobczak & Dariusz Soboń & Jacek Stasiak, 2022. "Hydropower in the Energy Market in Poland and the Baltic States in the Light of the Challenges of Sustainable Development-An Overview of the Current State and Development Potential," Energies, MDPI, vol. 15(19), pages 1-19, October.
    13. Katsaprakakis, Dimitris Al. & Christakis, Dimitris G. & Zervos, Arthouros & Papantonis, Dimitris & Voutsinas, Spiros, 2008. "Pumped storage systems introduction in isolated power production systems," Renewable Energy, Elsevier, vol. 33(3), pages 467-490.
    14. Rômulo de Oliveira Azevêdo & Paulo Rotela Junior & Luiz Célio Souza Rocha & Gianfranco Chicco & Giancarlo Aquila & Rogério Santana Peruchi, 2020. "Identification and Analysis of Impact Factors on the Economic Feasibility of Photovoltaic Energy Investments," Sustainability, MDPI, vol. 12(17), pages 1-40, September.
    15. Roma, Antonio & Pirino, Davide, 2009. "The extraction of natural resources: The role of thermodynamic efficiency," Ecological Economics, Elsevier, vol. 68(10), pages 2594-2606, August.
    16. de Oliveira, Lucas Guedes & Aquila, Giancarlo & Balestrassi, Pedro Paulo & de Paiva, Anderson Paulo & de Queiroz, Anderson Rodrigo & de Oliveira Pamplona, Edson & Camatta, Ulisses Pessin, 2020. "Evaluating economic feasibility and maximization of social welfare of photovoltaic projects developed for the Brazilian northeastern coast: An attribute agreement analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    17. Binz, Christian & Gosens, Jorrit & Hansen, Teis & Hansen, Ulrich Elmer, 2017. "Toward Technology-Sensitive Catching-Up Policies: Insights from Renewable Energy in China," World Development, Elsevier, vol. 96(C), pages 418-437.
    18. Jun Jin & Zhengyi Zhang & Liying Wang, 2019. "From the Host to the Home Country, the International Upgradation of EMNEs in Sustainability Industries—The Case of a Chinese PV Company," Sustainability, MDPI, vol. 11(19), pages 1-19, September.
    19. Biskup, Dirk, 2008. "A state-of-the-art review on scheduling with learning effects," European Journal of Operational Research, Elsevier, vol. 188(2), pages 315-329, July.
    20. Dusonchet, L. & Telaretti, E., 2015. "Comparative economic analysis of support policies for solar PV in the most representative EU countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 986-998.

    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:rensus:v:28:y:2013:i:c:p:531-540. 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.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    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.