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©Denis Lenardic
2001-2010
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Thursday
2nd Sep, 2010
21:45
This page was last time updated on
4th Apr, 2010
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Photovoltaic economics
"Do bear in mind: No one has ever scientifically proved solar energy
inefficient or non-economical. If such a scientific research had been
conducted, I would be eager to learn more about it."
Basic data about large-scale PV power plants in 2008 is available here.
Annual Review 2008 Free Edition now available as pdf file (5 MB).
Extended Edition (about 90 pages) will be published on CD and it will be available on June 22nd.
Some important terms related to photovoltaic system economics are presented herein.
The most important PV economic parameters are the total costs of installing
a PV system, electricity price,
Feed-In tariffs and the energy payback time - EPBT.
Investments into renewable
energies, particular into PV and wind technologies are another economics related area.
The cost of a PV system is measured in price-per-peak-watt (€/Wp or US$/Wp for
example). "Peak Watt" is defined as the power at standard test
conditions (solar irradiation 1000 W/m2, AM of 1.5 and
temperature 25°C). Photovoltaic system costs encompass both
module and BOS costs. Module costs typically represents only 40-60 %
of total PV system costs. Typically the cost of installing a
photovoltaic system having a power of 1 kW ranges from 3500 € to
5000 €/kWp (2009). Approximately about half of this investment
would be for the PV modules, and the inverter, PV array support
structures, electrical cabling, equipment and installation would
account for the rest. Please note that BOS and installation costs
can vary significantly. For example: when costs for site
preparation, laying a foundation, system design and engineering,
permitting, as well as assembly and installation labour are higher,
total installation costs are higher also. The
life cycle cost (LCC) of a PV system may also include costs for site
preparation, system design and engineering, installation labour,
permits and operation and maintenance costs. Photovoltaic systems
have an anticipated 25-year lifetime. Operation and maintenance
costs, ranging between 0,02 to 0,1 cents/kWh. However, these costs
can vary significantly, ranging between as low as 0.01 €/kWh to
0.10 €/kWh. The higher reported costs included maintenance costs
for generators in remote hybrid PV systems, as well as capital
replacement costs due to environmental factors such as extreme
temperatures and vandalism. The most significant replacement cost
will likely be the battery. Some studies report that operation and
maintenance costs are well correlated to the system size, so 1 % of
total hardware costs (investment) operation and maintenance costs is expected.
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Investment costs |
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Typical investment costs in year 2009 are presented in the table below. Please
note that typical investment range is presented in the tables. Typical investment costs are
from 3500 €/kWp for thin film PV power plants up to 5500 €/kWp for c-Si
tracking power plants.
Photovoltaic system installation costs (in 2009) |
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Electricity price - toward grid parity |
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Electricity prices for systems with a planned 20 year lifetime with
discount rates in the range of 5 % to 8 % and for typical
annual yields of 900 kWh/kWp, 1000 kWh/kWp, 1500 kWh/kWp,
1700 kWh/kWp and 2000 kWh/kWp are presented in Figure below.
In this calculation annual maintenance costs representing 1 % of the
investment are considered. The yield range presented in the abovementioned
Figure covers (rough estimate) the typical annual yield achievable
in European countries. 900 kWh/kWp can be attained in northern Germany
using fixed mounted systems, while up to 1500 kWh/kWp is possible
in Italy, Greece and Spain and about 2000 kWh/kWp in those same countries
using two-axis tracking systems.
Electricity price for a 5 % discount rate and 20-year system lifetime for different yield rates (EUR/kWh and USD/kWh), sorted by annual yield. Source Large-Scale Photovoltaic Power Plants Annual Review 2008 Extended Edition, June 2009 |
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Feed-In tariffs |
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The economic viability of the photovoltaic power system depends upon the initial investment and the utility's payback rate. The payment for photovoltaic energy inserted into the grid (compared to the cost of conventional energy taken from the grid, r = ratio between these 2 prices) varies from country to country. Some european countries like Germany and Spain apply the highest payments.
Many different Buy-back schemes are applied around the world. Some of them are briefly described:
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Energy Payback Time - EPBT |
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Energy Payback Time - EPBT is the time necessary for a photovoltaic panel to
generate the energy equivalent to that used to produce it. E. Alsema made some
interesting EPBT calculations for photovoltaic modules. He estimates 600 kWh/m2
energy produced with monocrystal-silicon modules or 420 kWh/m2 with
polycrystalline silicon is used to make near-future, frameless PV systems.
Assuming 12 % conversion efficiency (standard conditions) and 1,700 kWh/m2
per year of available sunlight energy, Alsema calculated a payback of about 4
years for contemporary polycrystalline-silicon PV systems. Projecting 10 years
into the future, he assumes a "solar grade" silicon feedstock and 14 %
efficiency, dropping energy payback to about 2 years. Some other calculations
generally support Alsema's predictions. For amorphous-silicon Alsema estimates
that it takes 120 kWh/m2 to make near-future, frameless amorphous-silicon
PV modules. He adds another 120 kWh/m2 per frame and support structure
(for a rooftop-mounted, grid-connected system). At 6 % conversion efficiency (standard
conditions) and 1,700 kWh/m2 per year of available sunlight energy, Alsema
calculated a payback of about 3 years for contemporary thin-film PV systems. Kato
and Palz for example calculated even shorter paybacks for amorphous-silicon, each
ranging from 1-2 years. Some links with detailed information about EPBT are available below -
for photovoltaic and even for solar thermal systems.
EPBT of photovoltaic systems
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Kato, K.; Murata, A.; Sakuta, K.: Energy Payback Time and Life-Cycle CO2 Emission of Residential PV Power System with Silicon
PV Module; Progress in Photovoltaics, Research and Applications, 6, 110-115, 1998.
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Photovoltaic economics related web sites |
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pvxchange PV Price Navigator - Through this hourly updated, analytical tool, you gain insight into pricing trends of more than 30 PV module brands on the European PV market. The price information is subdivided into different downstream value chain levels, ranging from factory gate to installer level. A user-friendly toolbar allows in addition for individual requests and personalisation of the Monitor. Languages:
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PV Insights - PV Insights, a premier international solar PV research firm, helps leading solar PV companies and financial professionals making real time decisions on business strategy, component procurements and investments by insightful reports, advisory service, and efficient price reports. Languages:
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Solarbuzz -
Solar energy portal - Topics related to the Solar Industry. The primary focus of the site content is Photovoltaics
(solar electric), The goal of the Solarbuzz Portal is to ensure that the content is independent in nature and
gives profile to the many applications and regions where solar energy is making in-roads.
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Greenpeace Energy - Green electricity in Germany - power plants, facts and prices. Languages:
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Photovoltaik Profit - German pages about photovoltaic economics. Languages:
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The Database of State Incentives for Renewable Energy - DSIRE - The Database of State Incentives for Renewable Energy (DSIRE) is a comprehensive source of information on state, local, utility, and selected US federal incentives that promote renewable energy. Languages:
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Solar/photovoltaic stocks |
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Photovoltaic Stock Index (PPVX) - The PPVX is calculated weekly on a € base. To be included in the PPVX, more than 50 percent of a company's sales in the previous year must have come through PV products or services. Languages:
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EnergyTechStocks.com - the financial news site for the global energy tech revolution Languages: |
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On-Line tools and calculators |
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ICBE CO2 Reduction Calculator - This calculator estimates the time and cost required to phase out CO2 production with renewable energy and carbon sinks. You can make custom calculations in the following table by modifying values or adding different types of sinks. Since CO2 has a global effect, these systems and sinks could be anywhere in the world and claims to these reductions can be secured by obtaining emission reduction credits (ERC's) through this and other institutions.
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LIOR International - the leading information reference in sustainable technologies. Under section "Formulae" formulas and equations for PV system energy output and cost of electricity from PV systems can be found. Languages:
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Investments |
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GreenValue - Auf greenValue finden Sie Beteiligungs- und Investitionsangebote unter anderem aus den Bereichen Photovoltaik, Windkraft, Biogas- und Biomasse, Geothermie und nachhaltiger Forstwirtschaft. Languages:
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Ecoreporter - Investments into renewable energy. Languages:
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OEKO-invest - das Portal für Ökologische Investments. Languages:
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Renewable energy policy - facts & figures |
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RES LEGAL - the website on legislation on renewable energy generation. Here you will find a collection of and information on the most important legislation on the support schemes and grid access for electricity from renewable sources within the EU 27.
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Sustainable Energy Development Office - SEDO - The Sustainable Energy Development Office was established to help deliver the Government of Western Australia’s sustainable energy policy.
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Market trends and research |
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ABS – Solar Photovoltaics market research - ABS is an independent energy market research company, producing reports, analysis, databases and forecasts on the Photovoltaics industry. Languages:
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Photovoltaics in 2010 - Photovoltaics: Current Status And A Strategy For €opean Industrial And Market Development To The Year 2010; EPIA (1320 kB). Languages: |
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Solar20 - the Solar20's mission is to produce solar power at an investment of 1 USD/Wp. It seems to be possible by using of state-of-art solar cells that operate with 20% efficiency at a light concentration of 20 times (20 suns). Languages: |
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Literature and more information |
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