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Payback analysis for solar power plants in Ukraine

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According to the European Photovoltaic Association EPIA total capacity installed worldwide solar power has grown over the past 12 years from 1.5 to more than 100 GW. By the end of 2012 in Europe alone has installed more than 70 GW of solar panels, of which Ukraine had 373 MW. Below is a chart with more detailed data of the year and region, which illustrates the rapid development of the industry, without slowing down even during the global financial crisis. More information you will find in the report EPIA «Overview of the global solar energy market 2013-2017» (EN, pdf - 5,6 Mb).

Установленная мощность солнечных электростанций в 2000-2012 годах

From the above figures it is clear that solar power — is not only held the industry, but also a branch of economics which awaits the rapid development in the coming decades. One of the major reasons for this is the fact that the cost of solar power is steadily decreasing, leading to a permanent reduction in price of electricity generated and reduce the payback period of such projects. Today, in many countries, including — in Ukraine has already begun price parity between the «solar» kilowatt hours and kilowatt-hours received from the socket. On the other hand, despite the fact that in Ukraine the cost of solar electricity for some projects already dropped below 50 cents, many potential owners of solar power plants still have questions about how to quickly pay off the investment in such projects. The answer to this question is given below.

Payback of solar power plants

In the analysis of payback, among other things depends on the type and purpose of the solar power plant and the cost of alternative solutions, with which it is compared. Consider this question on an example network of solar power plants (operating on «green tariff» or generating electricity for their own needs), as well as brick and mortar photovoltaic systems for backup or fully autonomous power.

As you know, after recent changes in the Ukrainian legislation «green tariff» for solar power fell to the following values: for terrestrial objects — 0.339 euro/kWh for roof objects bigger than 100 kW — 0.349 euro/kWh for roof objects up to 100 kW — 0.359 euro/kWh. On the other hand, capital investment for roof and ground solar power plants are dependent on the size of the project. Calculations for photovoltaic power plants with capacity of 50, 250 and 1000 kW at current prices for equipment and construction work show that the payback of such projects varies from 8.5 years for terrestrial solar power plants built to the north of Ukraine, 5 years for solar power plants located on the roofs of buildings in the southern regions.

Окупаемость солнечных электростанций в Украине в 2013 году

In the figure above we used the following notation: FIT-Ground (N) — ground mounted solar power plants using «green tariff» and built in the northern regions of Ukraine; FIT-Gound (S) — ground mounted PV plants using feed-in-tariff (FIT) and built in the southern regions of Ukraine; FIT-Roof (N) — solar power plants operating using «green tariff» and installed on the roofs of buildings in the northern regions of Ukraine ; FIT-Roof (S) — power plants operating in the «green tariff» and installed on the roofs of buildings in the southern regions of Ukraine; Roof (N) — roof mounted solar plants, built in the northern regions of Ukraine in order to generate electricity for own consumption without FIT; Roof (S) — roof mounted PV power plants, built in the southern regions of Ukraine for own consumption. The vertical axis indicates the payback period in years, and the horizontal axis — installed capacity of solar power plants.

Payback period of solar power station in Ukraine

On-grid solar power plants that produce electricity for their own needs, usually mounted on the roofs of buildings (manufacturing plants, logistics, shopping and office centers, etc.). Rejection of the «green tariff» can significantly reduce capital costs by using cheaper imported solar modules. In assessing the payback of this type must take into account the cost of conventional electricity, which will be replaced by the use of «solar». For example, calculations shown that the return on investment ranges from 13 to 8 years, depending on geographic location. When calculating the payback was not considered a permanent increase in tariffs for traditional electricity that occurs lately more and more.

As for off-grid solar power, their use is usually justified in cases when you cannot connect to the network are experiencing frequent power failures or power not dedicated enough to work in the daytime. The use of reserve or fully autonomous solar power becomes relevant, and sometimes — even the only way to ensure guaranteed power facility. Calculation of return in such cases shall be held not in comparison with the cost of traditional kWh of electricity, and taking into account the capital cost of upgrading power lines and transformer substations increase in power or in comparison with the cost of electricity generated using other types of generators (e.g., diesel generators). Accordingly, the payback period of solar power brick and mortar is heavily dependent on the particular project and can vary widely.

From the above data it is clear that in Ukraine there are many opportunities and prerequisites for the construction of solar power plants of various types with return on investment of less than 10 years. Given this fact, and other well-known advantages of solar power can safely say that the attractiveness of solar energy in Ukraine every day will increase.

Construction of industrial solar power plants
Equipment for solar power plants
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