Rethnam, O R; Palaniappan, S and Ashokkumar, V (2020) Life cycle cost analysis of 1mw power generation using roof-top solar PV panels. Built Environment Project and Asset Management, 10(1), pp. 124-139. ISSN 2044-124X
Abstract
Purpose: The purpose of this paper is to focus on life cycle cost analysis (LCCA) of 1 MW roof-top Solar Photovoltaic (PV) panels installed in warm and humid climatic region in Southern India. The effect of actual power generated from solar PV panels on financial indicators is evaluated. Design/methodology/approach: LCCA is done using the actual power generated from solar PV panels for one year. The net present value (NPV), internal rate of return (IRR), simple payback period (SPP) and discounted payback period (DPP) are determined for a base case scenario. The effect of service life and the differences between the ideal power expected and the actual power generated is evaluated. Findings: A base case scenario is evaluated using the actual power generation data, 25-year service life and 6 percent discount rate. The NPV, IRR, SPP and DPP are found to be INR 13m, 8 percent, 10.9 years and 18.8 years respectively. It is found that the actual power generated is about one-third less than the ideal power estimated by consultants prior to project bidding. The payback period increases by 70–120 percent when the actual power generated from solar PV panels is considered. Originality/value: The return on investment calculated based on ideal power generation data without considering the operation and maintenance related aspects may lead to incorrect financial assessment. Hence, strategies toward solar power generation should also focus on the actual system performance during operation.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | life cycle cost; roof-top solar pv panel |
| Index terms: | service life, operation and maintenance, strategy, life cycle cost analysis, net present value, life cycle cost, methodology, photovoltaic, payback, return on investment, roof, India, solar power generation, power generation, bidding |
| Subjects: | economic analysis, bidding, energy systems, asset management, Geography, research methods, maintenance engineering, economics, management, design practice |
| Topics: | Design Practice, Procurement, Sustainability, Business Strategy, Cost Management, Geographical Context, Research Practice |
| Descriptive scope: | 4 PCTA |
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