Pre-feasibility study for roof PV power system in Split, Croatia

By

Ante Toji & Stjepan Galambo

for ME3114 Renewable Energy Teacher: Sandra Godoy London, December 2011

Contents:
1. 2. 3. 1) 2) 3) 4) 5) 4. Executive summary ............................................................................................................... 2 PV technology ....................................................................................................................... 2 Pre-feasibility analysis using RETScreen software................................................................... 4 RETScreen .................................................................................................................................... 4 Energy model............................................................................................................................... 4 Cost analysis ................................................................................................................................ 6 Emission analysis ......................................................................................................................... 8 Financial analysis ......................................................................................................................... 9 References .......................................................................................................................... 11

1. Executive summary
Within this mini-project we decided to do a pre-feasibility analysis of roof PV system in Split, Croatia. As Split is relatively south in comparison with rest of the Europe and as from our own experience we knew it had lot of sunny days we decided to analyze viability of installing roof PV system. The brief analysis with RETScreen software show that, due to high incentives for PV in Croatia, it would be a very profitable investment with equity payback time of just 2,8 years and 5,67 benefitcost ratio. Calculation used is probably too optimistic, but projects viability is unquestionable. Complete analysis is explained in detail in section 3.

2. PV technology
Due to high increase in energy consumption and also increased awareness of environmental protection, renewable energy production is currently subsidized all over the world. Photovoltaic systems represent one of renewable energy sources. PV modules are used for direct conversion of solar radiation into electricity, which is most widely used form of energy. That conversion is based on photovoltaic that effect was first discovered by Mr Edmond Becquerel in 1839. The photovoltaic effect is actually generation of voltage difference in material due to its exposure to the light. A solar cell consists of layers of semiconductor materials with different electronic properties. When light hits the solar cell, some of the photons are absorbed in the silicon and thus generate voltage difference. The photovoltaic process is completely solid-state and self-contained and the PV cells produce no emissions and use no fuel. Main components of the general PV system: - PV modules (arrays) - Control panel - Power storage system (batteries)
- Inverter - Backup power supply (generator, grid)

Industry of PV panel manufacturing is one of the fastest growing industries at the moment. Cause of increased production is both technological progress in material, concept and production process research and strong political support through high incentives for PV systems installation. The most important material for production of solar cells is silicon. Silicon feedstock is melted in a crucible to form either monocrystalline or multicrystalline silicon. The monocrystalline type of silicon cells has high manufacturing cost, because the crystal growth process is very expensive. The polycrystalline or multicrystalline cells are less expensive to produce than Mono-Si cells, but are less efficient. Analysts have predicted that prices of polycrystalline silicon will drop as companies are building additional manufacturing capacity quicker than the industry's projected demand. Silicon used in PV modules is non-toxic.

Figure 1- Examples of monocrystalline and polycrystalline cells

Thin-film solar cells are made by depositing one or more thin layers of PV material on substrate, and are usually divided according to PV material used into: - Amorphous (a-Si) and other thin-film silicon (TF-Si) - Cadmium Telluride (CdTe) - Copper indium gallium selenide (CIS or CIGS) - Dye-sensitized solar cell and other organic solar cells Their main advantage over traditional panels is that they are low in weight, are not subject to wind lifting and can be walked on. But they have increased cost and reduced efficiency.

Lifespan Most commercially available solar panels are capable of producing electricity for at least twenty years. The typical warranty given by panel manufacturers is over 90% of rated output for the first 10 years and over 80% for the first 20 years. Panels are expected to function for a period of about 30 to 40 years.

3. Pre-feasibility analysis using RETScreen software

1) RETScreen
For our analysis we used RETScreen 4 Clean Energy Project Analysis software tool. It is free-of-charge excel-based software provided by the Government of Canada for evaluation of energy production, savings, costs, emission reductions, financial viability and risk for various renewable energy technologies.

2) Energy model

After brief comparison of efficiencies and prices of available PV modules we decided to use Shotts poly-Si Poly 230W modules for analysis. Model with modules fixed at optimal annual inclination is used for cheapest mounting structure and maintenance costs i.e. lowest initial costs. As Split is located at 4330N latitude, optimal annual tilt of modules is 30, with 0 azimuth. In order to prevent mutual shading of PV modules, with given module dimensions (Table 1.), calculation (Figure 2) has been made to show how many modules can be installed on hypothetical flat roof of 300 m2, fixed at optimal annual tilt. Angle of 23is the lowest solar altitude for a given location throughout the year. It showed that each module uses approx. 3,46 m2 of the roof. Length [mm] Width [mm] 1685 993

Table 1. Dimensions of Shott poly 230W module

5m .6 8 1 L=
30 23

D1=1.46 m

D2=2 m

Figure 2- Calculation of distance between modules in order to eliminate mutual shading

Therefore we could theoretically install 86,7 modules on 300 m2 of flat surface, but we decided to use 80 modules (18.4 kW) in order to maybe avoid any possible restrictions on roof and to easy later serial-parallel connection of modules (because of given number, 80). Capacity factor, optimal annual tilt and lowest solar altitude are taken from Solar radiation handbook of Croatia written by EIHP. At the moment, Croatia has strong system of incentives for PV power plants with feed-in tariffs up to 4-6 times (depending on installed capacity) higher than the average price of electricity. Currently, for systems with 10-30 kW installed capacity (as one analyzed) feed-in tariff is approximately 610 US dollars. For this reason only, we decided to analyze this system as central-grid i.e. selling all of produced electricity at incentive price to grid operator. The off-grid system would make sense only in the areas without possible grid connection (such as some mountains or islands). The other advantage of this is reduction of initial costs as there is no need for batteries and charge-controller.

3) Cost analysis

Financial inputs for analysis are calculated from data taken from the study by Fractal d.o.o. company from Split. Within that study they calculated current average values for individual components of costs for investment in roof PVPP in Croatia. Average costs from their data are as listed below:

a) b) c) d)

FN modules: 1.250 euro/kW Inverter(s): 260 euro/kW Construction: 350 euro/kW Other works: 250 euro/kW

By converting that values to US dollars and multiplying them with 18,4 kW we got our input parameters. Cost of other works we separated into Transportation and Training and commissioning with 1:3 ratio. Annual maintenance has been calculated as 2% and insurance premium as 0.8% of initial investment. Only one periodic cost occurring at the half of projects lifetime (13 years) is the replacement of inverter(s) which is calculated as 60% of initial inverter cost. 6

Due to complicated legislation, preparing of all required documentation (preliminary design, main design,...) and issuing of all necessary permits, approvals and agreements, project development costs are estimated at 10 000$. Afterwards they are divided into Development and Engineering (6:4). Also the contingencies are set to 5% for initial and 10% for annual costs.

4) Emission analysis

As there are no emissions from PV system these views are given only to show what would be the equal annual GHG emission for the production of the same energy using: a) Oil 14 tCO2 (according to RETScreen it is equivalent to 1,3 hectares of forest absorbing carbon) b) Coal 20,5 tCO2 (equivalent to 1,9 hectares of forest absorbing carbon)

5) Financial analysis

Inflation rate and debt interest rate are taken as they can currently be expected in Croatia, and it is predicted that investor uses 12 year debt to cover 80% of the investment. Expected electricity escalation rate given by Fractal d.o.o. is 3,5%, but by reducing it to 3% we are simulating annual degradation of PV modules. Financial analysis shows great results with equity payback time of just 2,8 years and 5,67 benefit-cost ratio. 9

Nevertheless, this is very optimistic calculation because incentive feed-in tariff is currently guaranteed just for first 12 years of operation. In this calculation it is assumed that the feed-in tariff will be the same (taking into account escalation rate) throughout the whole lifetime. But even if we assume that after 12 years producer will have to sell electricity at market value (5-6 times less), still the annual income would exceed expenditures and there would be no loss, just smaller profit. Line on the cumulative cash flow graph would still be going up, just with smaller slope.

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4. References
All technical and financial data used in analysis have been taken from: a) Roof PV power plants in Croatia, basic regulatory, technical and economic conditions, Fractal d.o.o., October 2011. b) Solar radiation handbook of Croatia, EIHP, March 2007. c) www.shottsolar.com d) www.retsreen.net e) en.wikipedia.org/wiki/

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