Financial Feasibility Study of Installing Solar Photovoltaic Rooftop for Residential Sector
Keywords:
Solar Rooftop, Financial Feasibility, Residential SectorAbstract
This research assessed the financial feasibility of installing a solar rooftop system for households under the government's stimulus program using system sizes of 3 kWp, 5 kWp, and 10 kWp as cases study. Internal rate of return (IRR) was used as an indicator so that the results can be compared with other investment alternatives. Financial feasibility criteria was set two levels: 1) a minimum loan rate (6.3%) for homeowners having mortgage loan and 2) government bond rate (2.5%) for homeowners without mortgage loan. The results showed that the 10 kWp system was financially feasible through the second criteria, while the 3 kWp and 5 kWp systems did not meet both of the financial feasibility criteria. In addition, a sensitivity analysis and scenario analysis were performed to assess the project risks considering the variables: 1) an electricity self-consumption ratio and 2) an annual escalation rate of electricity tariff. The results suggested that the solar rooftop is more suitable for installation for self-consumption than installation for selling the electricity back to the electrical grid.
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