Solar energy in Finland has reached it’s break even point in recent years and has thus become profitable even without governmental subsidies. Solar energy investments should be compared to the energy prices of current energy use (see: PV LCOE Report_July 2015). Instead of forming separate power plants, solar panels and collectors can also be incorporated into buildings as wall and roof materials. Profitability consists of sevaral variables: price of the system, intallment angle of the panels/collectors and fitting the plant capacity to energy demand. See separate profitability analyses for solar PV and thermal:
Solar energy system is a long term investment Solar investment profitability should be assessed by comparing the LCOE (levelized cost of energy) price to the current energy system price. LCOE assesment should take into account the whole lifetime of a solar plant which is 30 years on average. Calculating net present value for solar investment is also a solid method for profitability evaluations. In net present value (NPA) the lifetime of income and costs is taken into account in current monetary system. A third tool that takes the long lifetime of solar energy investments into account is internal rate of return (IRR). It can also help to evaluate the rate of generated income of the energy investment as a whole. The larger the rate is, the more profitable the investment will be. These methodologies can be tested with FinSolar profitability calculators. Pay back time is not a suitable measure to evaluate solar energy investment profitability Pay back time does not take into account the value of energy produced after it’s focus period and is therefore a misleading tool to assess solar energy profitability. Even though the payback time would be 15 years, the solar energy system will be fully functional for at least 15 years more after it has ”paid it’s price back”. Pay back time fits for situations where there is a risk of the investment losing it’s value in a short period of time. [1] Solar energy systems bear a minimal chance of losing their value before the pay back time (usually 8-16 years) and are also very low maintenance. Writer: DI Karoliina Auvinen, Aalto University Updated: 14.9.2015 References [1] Vierros Tuomo, 2009. Investointilaskelmat [verkko-oppimateriaali]. TU-22.1101 Tuotantotalouden peruskurssi [viitattu 3.2.2015]. Saatavissa: https://wiki.aalto.fi/display/TU22/8.+Investointilaskelmat