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Economic analaysis of an on-grid photovoltaic system

Conference Paper · November 2018

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 Oral Presentation

Economic analysis of an on-grid photovoltaic system

Kivanc Basaran1*, Hasan Sirdas2

1
Manisa Celal Bayar University, Hasan Ferdi Tugutlu Technology Faculty, Energy Systems Engineering,
Turgutlu/Turkey
2
Manisa Celal Bayar University, Hasan Ferdi Tugutlu Technology Faculty, Energy Systems Engineering,
Turgutlu/Turkey

*[Link]@[Link]

Abstract

Solar energy has the greatest potential among renewable energy sources. Therefore, PV
systems for electricity generation are becoming more common. This paper present design and
economic analysis of a grid-connected PV system installed on the roof of a building located in
Manisa, Turkey. The meteorological data which are required to calculation of PV system
equipment was taken from PVGIS and PVsyst programe. In addition to the amount of energy
consumption of household, the roof area and the amount of radiation were considered. Daily
energy requirement calculated as 0.335 kWh/day for a selected house. This system consists of
4 PV panels of 250W, 30 Ah DC/DC converter with MPPT and 3000 W inverter. Acording to
results of study, proposed system can produce 1645 kWh/year in a year. Also in this study,
economic analysis was performed by taking into account the annual amount of energy
production, initial investment cost, interest rate, inflation rate and operating-maintenance cost.
The life cycle cost (LCC), annualized life cycle cost (ALCC) and the unit electricity cost was
calculated to determine the efficiency of system.

Keywords: on gird PV, economic analaysis, LCC, ALCC, methodology for PV system sizing

Introduction

Energy is one of the biggest necessity in the world. Convential energy sources such as fossil
fuels have been decreasing day by day, because of that reason renewable energy sources will
become more popular in a couple of years. At the end of the first half of 2018, in Turkey
distribution of installed power according to sources are 32.0% hydraulic energy, 26.4%
natural gas, 21.4% coal, 7.7% wind, 5.4% solar, 1.3% geothermal and and 5.8% is in the form
of other sources [WEB_01]. Turkey is a sunbelt country in terms of location. According to the
Atlas of Solar Energy Potential’s research, in Turkey (GEPA) annual total sunshine time is
2.737 hours (7.5 hours per day), and annual total solar energy is 1.527 kWh/m²*year (daily
total 4.2 kWh/m²). The development of technology and due to incentives for renewable
energy projects, photovoltaic (PV) solar energy systems has become widespread in Turkey.
Grid-connected PV systems can be used to meet the household consumption. The system has
3 basic system components that are solar panels, grid-connected inverters and bidirectional
electrical counters.
Some of the advantages of grid-connected PV systems are as follows:
• Grid-connected PV systems do not require storage. So there is no additional cost
of a battery.
• Energy losses are minimized because energy cycle is shorter than the off grid PV
system.
• In case of the produced energy insufficient the required energy is supplied from
the grid.

The performance of a grid connected PV system is greatly affected by PV modules, inverters

and installation configuration. The effect of global radiation, environmental temperature and
pollution losses have less influence [1].
Shukla et al. (2016a) analyzed the performance of a PV solar energy systems by comparing
the performance of different PV Technologies [2]. Other on-grid PV studies purpose to
determine the refernece yield, final yield, system looses, capacity factor and performance ratio
[3][4][5][6].
Saeed et al. (2015) were compared two common PV module technologies (m-Si and p-Si).
Different studies on the performance parameters of the installed PV power plants in different
geographic areas and different climatic conditions has made [7].
(Abdul Ghafoor, Anjum Munir, 2014) has designed the off-grid PV system for a home in
Faisalabad, Pakistan. To design the system; PV power rating, the battery storage capacity,
size of charge controller and inverter were calculated. The economics evaluation using life
cycle cost analysis (LCCA) of the complete system has also been carried out. The annualized
life cycle cost (LCC) was determined. The economic analysis was performed for off-grid PV
system in Refrence [8].
PV solar power systems and solar radiation has done pioneering work in the field of modeling
in reference [9].

1. Materials and Methods

Description of PV System Plant

In this study, on-grid PV system has been designed under climate conditions of
Turgutlu/Manisa (38.5 N, 27.70 E, 68 m). The meteorological data was collected from the
PVGIS program. We assumed that the PV system at fixed tilt (30°C) and azimuth (0 °C to the
South) angles.
Figure 1 indicates that the daily average solar irardiation data in Turgutlu/Manisa. All the
irradiation data was taken from PVGIS-SARAH and PVGIS-CMSAF databases.
 Figure 1. Monthly irradiation data in Turgutlu/Manisa.

2. Components and Design of an on-grid system

The key parts of the on-grid system are PV-array, inverter and electrical counter. The
conversion of the electricity from sunlight is obtained directly by PV array. The obtained DC
electricity voltage is converted by inverter to AC electrical energy. Inverter collaborates with
the power that comes from solar panel and grid. Electrical counters are transmits the
electricity from grid to home [WEB_02].

Figure 2. Block diagram of on-grid PV system

Table 1 and 2 illustrates that properties of PV array and inverter respectively. These data will
use in the economical analysis of and on-grid PV system section.

Table 1. Technical Data of PV panel

Parameters Value
Maximum Power 250 W
Voltage at maximum power 29.9
Current at maximum power 8.36
Open circuit voltage 37.3 V
Short circuit current 8.81
Temp. Coeff. of Pmpp -0.408%/K

Table 2. Technical Data of Inverter

Parameters Value
Maximum Power 3000 W
Output Voltage 230 V AC
Input Voltage 24 V DC
Efficieny 97%

Proposed Residential Load Profile

The determination of necessary energy amount of the load is one of the most important part in
on-grids systems. Load power and usage time should be known to determine the necessary
energy amount of the load. An equipment were choosed that has commonly used in the
residential houses. It is assumed as some of the equipments were used just one time in a week,
while other equipments were used more than one times. Table 3 shows that the necessery
energy amount for a residual house.

Table 3. Electrical Load and Operating Time

Daily Weekly
No. of Unit Total Operating Daily Energy Energy
Equipment Equipments Power Power Time Required Required(W.h)
Lamps (A) 3 18 54 6 324 2268
Lamps (B) 2 18 36 3 108 756
Refrigerator 1 100 100 10 1000 7000
TV 1 100 100 7 700 4900
Dishwasher 1 1100 1100 1.5 1650
Washing
Machine 1 800 800 1.5 1200
Computer 1 120 120 4 480 3360
Iron 1 2500 2500 1 2500
Hair Dreyer 1 1000 1000 0.05 0 50
Weekly_Total 23684
Daily 3383.428571

In the table 3. operating times for all components were assumed their average time. However
it depends on season to season. The daily required energy calculated as 3.383 kWh for the
selected house.

3. Methodology for PV system sizing and economic analysis

Sizing of the PV array

Equation (1) is used below for calculation of pv-array area [8].
(1)

Where; APV is the area of PV panels in m2, ELoad is the necessary amount of daily energy in
kWh/day, G is the average daily solar irradiation amount in kWh/m2day, is the
efficiency of PV panel in %, is the efficiency of the inverter and TCF is the temperature
correction factor. If PV area is determined, the peak PV power (Ppv) can be calculated with
equation 2.
(2)
In the equation above, refers to peak solar irradiance. Peak solar irradiance determined as
1000 in the standart test conditions (STC).

Sizing of inverter

Inverter size selected by taking into consideration of maximum expected power of AC loads
because it must be enough tp handle with it. However, the inverter power affects the cost of
investment as in other equipment. The power of the inverter was calculated with the help of
the diversity factor, since all devices operated at the same time is slight probability. The
diversity factor assumed as 0.7.

Economic Evaluation Method

To determine the best use of capital for equipment purchases LCC is the most important
parameter.
Table 4. Cost Data of Companents
Item Cost
PV Panel $0.7/Wp
Inverter $251/Unit
Installation 10% of PV cost
O&M/yr 2%of PV cost
The total cost of PV array have been calculated with using following equation.

Cost of PV array; (3)

Equation (4) used to calculate present worth of maintenance cost (Cm). Mc is used to
represent annual maintanence cost. Lifetime of the system (N) also used in this calculation.

(4)

The installation cost is assumed as 10 % of initial cost of PV modules. With using all of these
economic calculations above, LCC can be calculated with using equation below.

(5)

The Annualized Life Cycle Cost (ALCC) can be calculated in terms of present value of off-
grid PV system by using equation (6) [10].

(6)

The unit electrical cost can be calculated using equation (7).

(7)

5 Results

The daily average irradiation amount was assumed as 5.50 kWh/m2*day, the area of PV
panel was calculated as 6.25 m2, for this calculation efficiency of PV panel and inverter was
taken as 15% and 90% respectively. Peak power calculated as 937.95Wp. Solar
irradiance was taken as 1000 W/m2. In Figure 1, it is clear that the maximum irradiation
value was observed in July and the minumum irradiation value observed in January and
December. The power of inverter was choosen as 3000 W, because it is the maximum
expected power of AC loads.
The LCCA of on-grid system includes the sum of PV array cost, inverter cost, installation
cost, and present worth of maintanance cost. In calculations, two of the necessary parameters
were inflation rate and discount rate that are 9% and 8% respectively. Equation 3 helps for the
calculation of cost of PV array which calculated as 700$. The inverter cost determined as
251$. The present worth of maintanance cost calculated as 395$ for 25 years. The installation
of PV system is taken as 10% of initial cost of PV system and was calculated to be 70$.
The summation of all of these results, Life Cycle Cost ( LCC) calculated to be 1416 $.
The Annualized Life Cycle Cost (ALCC) of the system was calculated to be 0.04$. The unit
electrical cost of the system was calculated to be 0.000032$.
 6 Conclusion

Although fossil fuels are very efficient energy resources, they produce toxic gases, because of
that governments and industry support the usage of renewable energy sources. This study
showed that on-grid systems with a suitable design and engineering calculations can be a rival
to traditional energy sources. As a result, the peak power and area of PV modules and inverter
power was calculated as 937.97 and 6.25 . This system can produce 1550 kWh energy
per year. The inverter input voltage was selected as 24 V and inverter power was choosen as
3000 W by taken into account diversity factor. This paper also can guide to analyse economic
feasibility of an on-grid PV system. Economic analysis of proposed on-grid PV system
indicate that the life cycle cost (LCC) is 1416 $, annualized life cycle cost (ALCC) is 0.04 $
and the unit electricity cost is 0.000032 $. This study concludes that on-grid PV systems are
feasible both economically and technically with applying methodology that described in this
paper. This methodology which is used in this paper is applicable in any geographical
location in the world.

7 References

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investigation of a grid-connected photovoltaic installation in Morocco. Energy Reports, 2,
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[2] Shukla, A.K., Sudhakar, K., Baredar, P., 2016a. Simulation and performance analysis
of 110 kWp grid-connected photovoltaic system for residential building in
India: A comparative analysis of various PV technology. Energy Rep. 2, 82–88.
[3] Yadav, S., Sudhakar, K., 2015. Different domestic designs of solar stills: a review.
Renewable Sustainable Energy Rev. 47, 718–731.
[4] Shukla, K.N., Rangnekar, S., Sudhakar, K., 2015a. Comparative study of isotropic and
anisotropic sky models to estimate solar radiation incident on tilted surface: A
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[6] Shukla, A.K., Sudhakar, K., Baredar, P., 2016b. Design, simulation and economic
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[7] Saeed, E., Mehran, A., Masoud, I., 2015. Comparative performance investigation
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[9] Padmavathi, K., Daniel, S., 2013. Performance analysis of a 3 MWp grid connected
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