Keywords

1 Introduction

Non-conventional energy sources produce clean energy. Solar energy is widely used and has a good potential of producing electricity [1]. Solar PV has the largest share among all the renewable energy resources in most parts of the world, including India [2]. In India, solar capacity has risen from 2.6 GW to over 36 GW in recent years. [3]. Since solar PV technology has increased immensely, economic analysis becomes important. Various studies have been carried out in different parts of the world including India on the same. Economics of a 120 kW photovoltaic system showed that the system was highly efficient with payback period 5.24 years and internal rate of return 31.88%. It was observed that the system degradation factor has an important role in economic analysis. It was finally concluded that the Middle Eastern part of the world had great potential for installing solar photovoltaic system [4]. In the last few years, Europe has grown rapidly in the PV market. A study has been done to evaluate the economic parameters in seven European countries with different schemes and different types of solar PV systems. It was observed that the size of the system had a significant effect on profitability. It was also seen that Germany, Italy, Spain, and Greece were the countries that had good potential to install PV systems due to favorable conditions. But overall, in most cases, the systems came out to be not profitable [5]. A PV system in Jeddah, Saudi Arabia was studied. The size of the system was estimated to be 12.25 kW. It was seen that performance ratio of the system was low because of the high solar cell temperature at that place which further affects the efficiency of solar cell. Performance ratio was 78%. Capacity factor was found out to be 22%. Economic analysis was done and it was estimated that the net present value was $4378 and payback period was 14.6 years [6]. A 2.1 kW system at Norwegian University was analyzed. The levelized cost of energy was calculated and it came out to be US $0.246/kWh which was much higher than the tariff in Norway. But feed-in-tariff and some financial support can increase the development of PV systems. Less sunlight and other climate factors may reduce the system’s economic utility [7]. Systems were evaluated economically and environmentally in several Italian locations. Less CO2 emissions were measured by reducing net present value and internal rate of return. The annual average insolation value and the design philosophy applied influenced the outcomes. The design principle also affects the performance of the PV plants. The results obtained by using both the design principles, i.e., the principle of first year and principle of economic maximization were almost similar [8]. A study for the University of Jordan has been done. Different types of solar PV systems like fixed axis, single axis, and double axis was studied. Two different engineering models, BOT and EPC, were taken into account while doing the study. The fixed axis system utilizing the EPC model was shown to be more advantageous with a 3-year payback period and an IRR of 32%. In the BOT model, the single axis system had the best payback period of 8.5 years [9]. Three different types of buildings in two different states with different price plans were studied. Some economic indicators were used to evaluate the economic benefits of using the PV system in these buildings. It was concluded that building 2 had better results in state A and building 3 had better results in state B. Investment was not profitable in both the states as payback period was more than 20 years [10]. The performance of a 27 kW grid-connected system was observed in Suriname. The PR and CF were found to be 74.5 and 15%, respectively. The NPV of the project was estimated as $−110,527. The results showed that since the payback period is much more than the lifetime of the system, the system under study was not economically feasible. Moreover, the levelized cost of energy of the system was found out to be 3.5 times more than the current price of energy in that place [11]. A 1 MWp PV system in Adam, Oman was analyzed. The yearly yield factor of the system is 1875.1 kWh/kWp. The PV system’s capacity factor was 21.7%. The energy cost was found to be roughly 0.2258 USD/kWh, with a 10-year payback period [12]. Along the southern coast of Iran, different cities were selected, and it was seen whether these places were suitable for developing PV plants or not. The results showed that the selected cities were good sites for installing PV plants and single axis system came out to be the most economical. The cost of electricity was also determined for various types of tracking systems [13]. Another 5kWp grid-connected system was studied in Iran. Different parameters were determined. The LCOE of the system was very high. A new dynamic FIT strategy was given which was even suitable for other developing nations [14]. Analysis of off-grid PV for a typical household building (power consumtion-9.57 units/day) and typical hostel building (Total power consumed per day = 600 kWh) was done. Lifetime profit (in 25 years) and payback for household building was found to be Rs. 3 lakh and 10.5 years and for hostel building, it was Rs. 1.95 crores and 10 years [15]. A study has been done on 110 kWp system Bhopal, India. The main idea of this study was to design the system and evaluates the economics of the proposed system. Payback period and net present value were calculated. Payback was 8.2 years and NPV was 1.12 [16]. The cost of electricity (COE) and payback period of four different systems in Lucknow, India hve been analyzed. System 1 (5 kWp) had cost of electricity-5.44 INR/kWh (30 years lifespan 5% interest rate) and payback period-13.36 years. System 2 (198 kWp) had COE-2.94 INR/kWh and payback period-6.87 years. System 3 (75 kWp) and system 4 (50kWp) had COE and payback period 2.88 INR/kWh and 6.71 years and 3.23 INR/kWh and 7.12 years, respectively [17]. Economic examination of solar energy systems such as sun drying, solar heating, and solar distillation units are covered in [18].

The objectives of the paper are as follows:

  1. 1.

    To do energy analysis of a 100 kWp PV system taking into account the degradation of PV modules.

  2. 2.

    To perform cost–benefit analysis for 25 years.

  3. 3.

    To calculate the payback period of the system.

  4. 4.

    Electricity bill analysis, power quality analysis, and comparison of fixed and running charges before and after the installation of the PV system.

The following is a breakdown of the paper’s structure:

Section 2 is system description.

Section 3 covers the methodology for economic analysis.

Section 4 of the paper is the result and discussion.

Section 5 of the paper is the conclusion.

2 System Description

The study system is 100 kWp PV at rooftop of institute building (26.23152  N, 78.20533  E). The location has extreme climatic conditions. Summer is very hot, humidity also increases, and winter is very cold. The PV system installed in the institution is divided into two parts. Each part is 50 kW with 154 panels and a 50 kW inverter. The effective area of each module is 1.955 × 0.982 m2 and produces 320 W peak power. PV modules are made by connecting solar cells. It is made of semiconductor material. When sunlight strikes solar cells, the photovoltaic effect produces electricity. The power output is a direct current supply that is transformed to an alternating current supply by an inverter. Metering is accomplished by net metering. Net metering assumes that the power generated by the PV plant is utilized first by the linked load. When the electricity produced by the PV plant exceeds the linked load, the excess PV produced power is fed back into the grid. When the electricity produced by the PV plant is less than the linked load, the extra demand is met by grid supply.

The grid-connected solar PV rooftop system consists of 308 PV modules. The rating of each module is given in Table 1.

Table 1 Rating of PV module
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The supply voltage from the grid to the college is 33 kV, and the contracted demand is 350 kVA. Institute load is connected to a 500 kVA transformer and hostel load is connected to a 315 kVA transformer (Fig. 1).

Fig. 1
figure 1

Systematic diagram of grid-connected solar PV system

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3 Economic Analysis of the System

Cost–benefit (CB) analysis

The economic analysis and calculation of the payback period of the system are done by cost–benefit (CB) analysis. In CB analysis, annual savings are calculated for the lifetime of the system (i.e., 25 years). Annual savings can be calculated by subtracting the annual cost from the annual benefits. The annual cost is the money that is spent on the system in a year (operation and maintenance cost). Annual benefit is the amount that is saved by generating electricity by a solar PV system. The amount of money saved is the amount it would have cost if the number of units generated by the PV system would have been taken from the grid supply. For calculating annual benefits, we need to find unit generation (kWh) of the system or how many units of electricity does the system generates in a year.

The following formula can be used for calculating the annual unit generation (kWh) of the solar PV system.

$$\begin{aligned} {\text{Unit}}\;{\text{generation}} & = {\text{system}}\;{\text{output}} \times {\text{capacity}}\;{\text{utilization}}\;{\text{factor}} \\ & \quad \times 24\;{\text{hours}} \times 365\;{\text{days}} \\ \end{aligned}$$
(1)

where capacity utilization factor is the ratio of actual output to the maximum possible output.

By knowing the unit generation of the system and unit price of electricity, we can find the annual benefits, i.e., savings in the electricity bills (Tables 2 and 3). For more accurate results, system degradation factor and escalation in the unit price of electricity are taken into account.

$${\text{Annual}}\;{\text{savings}} = {\text{Annual}}\;{\text{benefit}}{-}{\text{Annual}}\;{\text{cost}}$$
(2)
Table 2 Component wise cost of solar PV plant
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Table 3 Energy analysis for 25 years
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Calculation of simple payback period

Payback period is the time (in years) required for the initial investment of the system to be recovered. In order to calculate and analyze the simple payback time of the 100 kWp grid-connected solar PV system, annual savings at the end of each year are analyzed (Table 4). We need to find the time required to make the savings equal to the amount invested.

Table 4 Cost–benefit analysis for 25 years
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4 Result and Discussion

In our study, the initial investment of the entire system is Rs. 4,850,000, and operation and maintenance cost is taken as 2.5% of the initial cost. It is considered that the output of the system is reduced by 2% after the first year, and after the second year, it is reduced by 0.8% every year. Escalation in the unit price of electricity is taken as 3.84%. With the increasing scarcity of fossil fuels, the unit price of electricity is increasing every year [19]. Considering the past 3 years’ electricity bills, the escalation in electricity pricing is observed as 3.84%. The capacity utilization factor is taken as 15%. The cost–benefit analysis of the 100 kW grid-connected rooftop system for the next 25 years (the life of the system is considered as 25 years) is given in Table 4.

The cost for lightning protection and overvoltage protection installation has been considered in the total cost of the system. The cost of these components (Rs 704,480) is covered in electrical items, as mentioned in Table 2.

As per the calculation, the total savings at the end of the fifth year will be Rs. 4,299,225.37 and at the end of the sixth year will be Rs. 5,246,890.74. Since the initial investment is Rs. 4,850,000; therefore, the payback period will be approximately 5.5 years.

  • Savings after first year: Rs. 811,690.

  • Savings after second year: Rs. 811,690 + Rs. 828,139.60 = Rs. 1,639,829.60.

  • Savings after third year: Rs. 811,690 + Rs. 828,139.60 + Rs. 856,749.63 = Rs. 2,496,579.23.

  • Savings after fourth year: Rs. 811,690 + Rs. 828,139.60 + Rs. 856,749.63 + Rs. 886,156.98 = Rs. 3,382,736.21.

  • Savings after fifth year: Rs. 811,690 + Rs. 828,139.60 + Rs. 856,749.63 + Rs. 886,156.98 + Rs. 916,489.16 = Rs. 4,299,225.37.

  • Savings after sixth year: Rs. 811,690 + Rs. 828,139.60 + Rs. 856,749.63 + Rs. 886,156.98 + Rs. 916,489.16 + Rs. 947,665.37 = Rs. 5,246,890.74.

Payback period when escalation in the unit cost is considered is 5.5 years. If unit price is not increased, payback period comes out to be 6.5 years (Table 5).

Table 5 Comparison of payback period with variation in unit cost of electricity
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Analysis of electricity bills

In our study, analysis of electricity bills is also done. The solar PV rooftop system was installed in November 2019. A summary of the electricity bills from February 2019 to March 2021 is given in Table 6.

Table 6 Summary of electricity bill
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From the analysis, it can be seen that maximum demand has decreased after the installation of the solar PV system. The average maximum demand (kVA) before installation was 334.5 kVA and after the installation was 152.625 kVA. Also, it is evident that the power factor has decreased after the installation of the system. The average power factor before installation of the system was 0.963 and after the installation is 0.9143. It is a disadvantage that the power factor slightly decreases. The power factor of PV produced power majorly depends on inverter output power with respect to its rated power. During the morning and evening time, the PV generation is very low in comparison to the rated power of solar inverter [20, 21]. This reduces the average monthly power factor of the plant. It is clear from Table 6 that the fixed and running charges have also decreased after the installation of the solar PV system. Running charges has decreased from an average of Rs. 692,138.15 to an average of Rs. 293,981.875. Average electricity bill before the system was installed is Rs. 871,867 and the average electricity bill after the installation is Rs. 432,020.

5 Conclusion

The installation cost of the grid-connected solar PV rooftop system is very high. Since we invest a lot of money in the system, it becomes important to carry out economic analysis. It becomes important to analyze the payback period and other economic benefits. If the system is able to recover the invested amount in less than the lifetime (25 years) of the system, the system is considered to be economically feasible and efficient. Lesser the payback back period, the more efficient the system is.

  1. 1.

    In our study, the solar PV rooftop system has capital investment of Rs. 4,850,000. Economic analysis of the system is done by energy analysis, cost–benefit analysis, analyzing electricity bills, and by calculating the simple payback period.

  2. 2.

    Payback calculation is done by considering capacity utilization factor (CUF) equal to 15%, escalation in the unit price of electricity is taken as 3.84%, and O&M cost is taken as 2.5% of the initial cost. Considering this, the simple payback time is 5.5 years.

  3. 3.

    After analyzing the electricity bills, it was seen that the maximum demand decreases after the installation of the system. The power factor slightly decreases which is a disadvantage. The average power factor before installation of the system was 0.963 and after the installation is 0.9143. Measures should be taken to improve the power factor.

  4. 4.

    Fixed and running charges also decreased after the installation of the solar PV system. Average electricity bill before the system was installed is Rs. 871,867, and the average electricity bill after the installation is Rs. 432,020.

  5. 5.

    Since the payback is 5.5 years which is very less than the lifetime of the system, the system installed is economically efficient. Although the system under the study is economically efficient, the efficiency of the PV system can be further improved by proper maintenance of the system.