ECONOMIC ANALYSIS

The economic analysis of the solar PV-grid connected system is assessed by the following indicators: the levelized cost of electricity (LCOE) and net present cost (NPC) of the system. The effects of the cost of the PV and global solar radiation on these indicators are also presented in this section. The HOMER software determine the net present cost of the system as the different between the present value of all the costs of installing and operat­ing the system over its project lifetime, and the present value of all the rev­enues that it earns over the project lifetime. The variation of the NPC and LCOE with unit cost of the PV array is presented in Table 6. It should be mentioned that the presented LCOE and NPC are based on the net meter­ing on monthly purchases from grid. For the base case; PV cost of $2400/ kW, global solar radiation of 6.0 kW h/m2/day and grid price of electric-

Monthly Average Electric Production

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Jen Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

PV — Cod

 

Подпись: LCOE ($/kWh) з Povwr (kW)

E 5: Monthly distribution of the electricity produced by the energy system.

 

3 4 5 6 7 8 9 10

Global solar radiation (kWh/m2/day)

 

FIGURE 6: Effect of global solar radiation on the LCOE when the PV cost is $2400/kW.

 

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ity of $0.090/kW h (for R2 residential users), the NPC for this project is $530,090, annual operating cost is $17,103 and the cost of the electricity is $0.103/kW h. As the cost of the PV increases, the LCOE, as expected, increases gradually from $0.103/kW h (when the PV is cost of $2400/kW) to $0.159/kW h (when the PV is cost of $6000/kW). The observed incre­ment in the LCOE is primarily due to the increase in the initial capital cost of the PV which resulted in higher NPC when compared with the base case. It is expected that at lower PV cost (compared with the base case), the LCOE of the system will be reduced. For instance, when the simula­tion analysis was performed for PV cost of $1800 and $1200 per kW, the LCOE is found respectively as $0.081/kW h and $0.065/kW h. This shows that for the location considered in this study and similar locations in Zone I on the solar radiation map of Nigeria (see Fig. 1), solar PV-tied integration energy system is feasible and economically viable energy system.

The effect of global solar radiation on the LCOE is shown in Fig. 6 when the PV cost is $2400/kW. Two regions can be observed in this figure. These regions are: region 1 (when global solar radiation is less than or equal to about 7.0 kW h/m2/day)—a linear relationship exists between the global so­lar radiation and the LCOE. In this region, the LCOE is observed to decrease with increasing global solar radiation. In region 2 (when global solar radia­tion is greater than about 7.0 kW h/m2/day), the LCOE (at $0.093/kW h) is observed to be constant irrespective of the global solar radiation.

TABLE 6: Effect of PV cost on the LCOE and NPC.

PV Cost (/$/kW)

Initial capital ($)

Operating cost ($/yr)

Total NPC ($)

LCOE ($/kW h)

2400

254,220

17,103

530,090

0.103

3000

302,220

17,103

578,090

0.113

3600

350,220

17,103

626,090

0.122

4200

398,220

17,103

674,090

0.131

4800

446,220

17,103

722,090

0.141

6000

542,220

17,103

818,090

0.159

5.3 CONCLUSIONS

This study examines the feasibility of solar PV-grid tied energy system for electricity generation in a selected location in the northern part of Nigeria. The technical and economic performance of a combination of 80 kW solar PV and 100 kW power from the grid was investigated. It was found that this energy system can generates annual electricity of 331,536 kW h with solar PV contributing 40.4% and the levelized cost of energy is found to $0.103/kW h.

It is further observed that by reducing the initial installation costs (which consists of capital cost of the PV, connection cost and other associ­ated costs), the cost of electricity can be significantly reduced. In addition, it was observed that the global solar radiation plays significantly impact on the economic viability of this system. It is expected that incorporating solar PV with grid system can reduce carbon dioxide and other pollutant emissions associated with thermal power plants generated electricity.

The information presented in this paper can serve as input to the de­velopment of grid-connected solar PV energy system in Nigeria. Based on the findings from this study, the development of grid-connected solar PV system in the north-eastern part of Nigeria could be economically viable energy system. However, as a result of high initial investment cost of solar PV system, favorable policies and incentives from government can accel­erate the development of this type energy system in Nigeria. The logical next step from this study should be installation and performance assess­ment of practical grid-connected solar PV system in this location.