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A Case Study of Green Energy Roofs in Taiwan Using Financial Analyses

Author

Listed:
  • Meng-Yi Liu

    (Department of Risk Management and Wealth Planning, Takming University of Science and Technology, Taipei, Taiwan)

  • Dan Lin

    (Department of Banking and Finance, Takming University of Science and Technology, Taipei, Taiwan)

Abstract

As part of the low-carbon policy and development in Taiwan, the Bureau of Energy introduced the “Green Energy Roofs Project” in 2017, which encouraged homeowners to install green energy roofs. However, the incentives of homeowners and solar photovoltaic operators to participate in this Project were low. The aim of this study is to propose and evaluate alternative models for investing green energy roofs. The contributions of this study are that, first, we consider factors such as risk management schemes and crowdfunding that have not been considered in evaluating green energy roofs project. In addition, this study provides a solution to Taiwan government’s current dilemma about how to encourage homeowners to install green energy roofs. This study adopts five common investment appraisal methods (including payback period, discounted payback period, net present value, internal rate of return and profitability index) to evaluate four different models for investing green energy roofs. The results show that when homeowners are fully responsible for installation costs of green energy roofs with partial funds borrowed from banks and with consideration of risk management, the homeowners have better investment returns. Therefore, the Taiwan government could consider the alternative strategy proposed in this study for promoting green energy roofs so that the country can move a bigger step forward towards the goal of being nuclear-free.

Suggested Citation

  • Meng-Yi Liu & Dan Lin, 2021. "A Case Study of Green Energy Roofs in Taiwan Using Financial Analyses," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 12-20, July.
    • Handle: RePEc:rbs:ijfbss:v:10:y:2021:i:3:p:12-20
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