Technical and Economic Aspects of Gridconnected Solar Photovoltaics in Brazil - Implementing Environmental and Resource Management - page 53

indicators under variation of some of them was undertaken. The factors considered
were the following:
• Solar irradiation level (use of the PV system in other climatic zones of Brazil
with higher values as Santa Catarina) : as an example in Natal (capital of Rio
Grande do Norte, latitude 5.77 S, longitude 35.20 W), where the average solar
radiation throughout the year on a horizontal plane amounts 5.66
kWh/(m 2 *day) and there is little seasonal variation (minimum 4.53 in June,
maximum 6.67 in November); the average value at the optimum 3ºN of tilt
amounts 5.86 kWh/(m 2 *day) (UFRGS 2001).
• Assumption of an incentive purchase price system (feed-in tariff) : under this
system well established in Europe, all the electricity generated must be bought
by the distribution company at a premium price (typically 2 to 4 times the retail
sale price for regular customers), whereas the electricity consumed in the build-
ing is charged at the normal price. As an example, the calculations of the pro-
posed economic indicators have been repeated for a modified version of the
three configurations proposed, assuming that the electricity generation fed in
the public grid is paid at triple price (0.60 US$/kWh at today's value) than the
price of consumed electricity (0.20 US$/kWh at today's value).
• Increase of the electricity cost above the inflation rate : in many projects of re-
newable energies nowadays, the possibility of an increase of the energy prices
above inflation rates is considered verisimilar; in that case, the future cash
flows derived from electricity payments or savings must be calculated using
this higher rate, but for the rest of money flows the normal inflation rate will be
used. As an example, the calculations were repeated for the three configurations
proposed, without any technical modifications but assuming an average annual
percentage difference of 1% between the electricity cost increase and the infla-
tion rate.
• Partial subsidy or tax relief on the initial investment : one could consider the
factor that plans to promote the implementation of PV systems in the country
include measures to relieve a fixed percentage of the initial investment, being a
direct subsidy or an exemption of taxes. As example for this exercise, a reduc-
tion of 30% of the initial capital disbursement was assumed.
With all these considerations, a summarized table was prepared for each configu-
ration with the results of the economic indicators proposed (NPV at 30 years in
US$; Investment Payback time in years; IRR at 30 years in %), considering all
possible combinations. The order of influence of the variables that can be ob-
served is the following: firstly the greatest influence would come from the intro-
duction of a feed-in tariff of 3 times the retail sale price, secondly from situating
the building in a site with an average annual irradiation 23% higher; thirdly from a
capital or tax subsidy of 30%, and finally from the hypothetical 1% annual in-
crease of electricity prices above the inflation rate. For all cases, the investment
can be seen as acceptable when the payback time is lower than the expected life-
time (in this case 30 years) and the NPV is positive; this has been marked with the
numbers in italics. Besides, if the IRR is above the inflation rate considered (in
this case 5%) the investment would be lucrative and therefore advisable for any