Investment analysis of solar energy systems

Abstract

The energy consumption increases rapidly due to the growth on population, concerns of countries regarding economical advancements and unexpected improvements of the technology. The price of conventional energy reserves is rising day by day. Since the traditional energy resources are limited by nature, it is inevitable that all the countries in the world have been affected from this economically, politically and environmentally. The solar energy is a powerful alternative to the traditional energy resources and has a great potential to solve as well as eliminate above mentioned problems. In this study, it is aimed to create an engineering economy based investment analysis and generate a guideline for solar energy investments. Four different areas in Turkey that are suitable to implement the photovoltaic energy systems are selected and system’s size is assumed to be 10 MW for each installation. First, an analysis of solar radiation concept is introduced and several financial investment techniques are presented in the use of evaluation of the feasibility of photovoltaic energy systems. The irradiation rates of selected sites on inclined surfaces are determined, annual energy productions and required number of panels to provide planned energy amount are calculated by considering irradiation rates and average solar hours of the related areas. The viable capital budgeting techniques are used to evaluate the financial investments of the projects. The total life cycle method, the return on investment method and the payback period method are used for each of the four selected areas. The payback periods are estimated based on geographical condition of the regions considered in this study and applied technology efficiency rates. Through the obtained results, it is intended to create a guideline for the solar energy investors as well as the researchers in photovoltaic energy applications and provide a source of financial characteristics of solar energy systems. A set of conclusions are drawn based on the findings of this thesis, which are believed to be a useful source for both investors and academics.