Techno-Economic Analysis of Fixed and Single Axis Tracking Systems Using NPV and IRR Methods

Abstract

A low power, low cost, high utility value photovoltaic power generating system has been designed and developed with an intention of catering to the needs of the rural population located in far flung villages or hilly regions where electricity supply is either unavailable or is erratic. The proposed solar photovoltaic system has been subjected to rigorous performance evaluation using the four widely used performance metrics namely, Energy Gain, Panel Efficiency, Capacity Utilization Factor (CUF) and Performance Ratio (PR). Performance wise, the proposed single axis tracking system has been proved to be quite advantageous when compared to the latitude-tilt fixed panel system. It now becomes mandatory to ensure that the single axis system is also economically viable. Since the target customers belong to economically weaker strata of the society, the system has to be financially attractive if it has to have widespread acceptance. Financial analysis of the proposed system was carried out using two most trusted methods viz. NPV and IRR methods to ensure the system will return better economic benefits. The net cost of the proposed single axis sun tracking system is INR. 4066.00 and that of the latitude-tilt fixed panel is INR. 3413.00. Financial analysis using NPV method has shown that both the latitude-tilt fixed panel system and the single axis sun tracking systems have positive values of NPV (INR. 3237.02 for fixed tilt system and INR. 4997.12 for single axis sun tracking system). Hence both the project proposals can be accepted since both will be economically feasible for the investor. The financial analysis of both the latitude-tilt fixed system and the single axis tracking system was carried out using IRR method. Results of this financial analysis, show that the latitude-tilt fixed system has returned a value of 13.124% which is less than the normally acceptable value, while the IRR value obtained for the single axis tracking system is 15.491 % which is more than the normally specified level. Thus, the proposed single axis sun tracking system is a better option than the latitude-tilt fixed panel in terms of power output and also in terms of financial analysis