Environmental Engineering Reference
In-Depth Information
6.3.5 Cost Considerations for the Reference Case
The economic indicators chosen to evaluate the convenience of the solar roof con-
figurations proposed in this study are: the Net Present Value, NPV (that is today's
value of the annual cash flows during the projected lifetime of the facility); the In-
vestment Payback Time (that is how long it will take to recover the initial capital
investment); and the Internal Rate of Return, IRR (that is the rate of interest that a
bank should pay for the amount of the investment to equal the total cash flow re-
sulting from the project over the facility's lifetime). The expected project lifetime
used was 30 years, although most manufacturers offer a 20- or 25-year warranty.
In order to do this evaluation, one must carry out the cost breakdown of every
proposal and make the calculation of those three indicators by means of an elec-
tronic spreadsheet. The acquisition prices found for the solar modules and the in-
verters were: approx. 750 US$/unit (converted from 520€/unit) for the Würth So-
lar WS111007/75 modules (Catálogo Solar 2008); 920 US$/unit for the Kyocera
200GT modules and 225 US$/unit for the Kaneka GSA60 modules (Aten Solar
2008); and 4108 US$/unit for the SunnyBoy SB7000US inverter (Affordable So-
lar 2008). These prices were augmented by 22% due to the concepts of sale taxes
(VAT or similar) and freight, and an additional 31.25% due to the concept of im-
port taxes to Brazil, as indicated on the website of the country's Ministry of Fi-
nances (Ministério da Fazenda 2008). The cost of the remaining balance-of-
system (BOS) components (mounting frames, fusing, cabling etc.) was estimated
at about 1% of the sum of modules and inverters. The engineering and installation
cost was estimated at 6000 US$ for all cases. As for outcomes influencing the an-
nual cash-flow, an annual payment for maintenance was estimated at 0.2% of the
initial PV system cost, which eventually should cover repairs or substitution of
components; and the retail price for the electricity supplied by the utility to cus-
tomers (in the case of Net Metering equal to the price that will be received for the
electricity fed by the PV system to the utility) was assumed as 0.20 US$/kWh in
the initial year. Finally, the country's annual monetary depreciation rate (inflation)
was assumed at an average of 5%.
The formulae used for the calculation of the above mentioned indicators are:
NPV = [
1
Σ
n
(
(Annual Cash flow) / (1+i)
t
) ] - Investment, (6.1)
where i = (Money depreciation rate / 100) and t = 1 ÷ Project lifetime
(years), using if necessary the mathematical identity (6.2)
(1+
)
−1
1
Σ
n
(
(Annual Cash flow) / (1+i)
t
) = Annual Cash flow *
; (6.2)
(1+)
∗
Payback Time = value of 't' (in years) for which NPV = 0; (6.3)
IRR = value of 'i' (in %) for which NPV = 0 when t = project lifetime. (6.4)
The results obtained are as summarized in
Table 6.3
.
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