Analyzing Profitability and Discount Rates for Solar PV Plants. A Spanish Case

[EN] The widespread use of renewable energy sources and the growing concern about climate change, together with Spain's exceptional weather and solar radiation conditions, have led to an increase in the use of photovoltaics for energy production in the country. Solar power generation has been tightly regulated, although the legal framework has changed frequently over the years. When assessing the potential financial performance of any business venture, legal as well as financial aspects must be considered, but a critical factor is the discount rate used, which must reflect the company's capital cost. Other factors are the period of interest, the firm's activity, market risk, and the level of debt of firms in the sector. The main objective of this study is thus to estimate the discount rate for companies using photovoltaics to produce solar power. We calculate it by employing two financial techniques: capital asset pricing model and historical return analysis. We then evaluate the investment in a photovoltaic plant with a capacity of 5000 kW located in eastern Spain, assuming it started its activity in different years which coincide with changes in the regulatory framework. The results show the relevance of the initial outlay costs for the profitability of photovoltaic power plants.The translation has been funded by Facultad de Administracion y Direccion de Empresas (Universitat Politecnica de Valencia).Guaita-Pradas, I.; Blasco Ruíz, A. (2020). Analyzing Profitability and Discount Rates for Solar PV Plants. A Spanish Case. Sustainability. 12(8):1-13. https://doi.org/10.3390/su12083157S113128Fama, E. F., & French, K. R. (2005). Financing decisions: who issues stock? Journal of Financial Economics, 76(3), 549-582. doi:10.1016/j.jfineco.2004.10.003Guaita-Pradas, I., Marques-Perez, I., Gallego, A., & Segura, B. (2019). Analyzing territory for the sustainable development of solar photovoltaic power using GIS databases. 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Energy, 40(1), 370-375. doi:10.1016/j.energy.2012.01.053Karasmanaki, E., Galatsidas, S., & Tsantopoulos, G. (2019). An Investigation of Factors Affecting the Willingness to Invest in Renewables among Environmental Students: A Logistic Regression Approach. Sustainability, 11(18), 5012. doi:10.3390/su11185012Atănăsoae, P. (2020). Technical and Economic Assessment of Micro-Cogeneration Systems for Residential Applications. Sustainability, 12(3), 1074. doi:10.3390/su12031074García-Gusano, D., Espegren, K., Lind, A., & Kirkengen, M. (2016). The role of the discount rates in energy systems optimisation models. Renewable and Sustainable Energy Reviews, 59, 56-72. doi:10.1016/j.rser.2015.12.359Bustos, F., Toledo, A., Contreras, J., & Fuentes, A. (2016). Sensitivity analysis of a photovoltaic solar plant in Chile. Renewable Energy, 87, 145-153. doi:10.1016/j.renene.2015.09.070Ibbotson, R. G., & Chen, P. (2003). Long-Run Stock Returns: Participating in the Real Economy. 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Energy production and financial analysis of photovoltaic energy plants in Ivory Coast

One key factor for boosting economic growth in developing countries is the energetic independence of the countries. Renewable energies are well suited for such purpose even if effective dissemination of renewable energies is their production price. The energy production of solar plants is highly dependent of both sun radiation and climate data and therefore dependent of their location. This paper reports on the economic and financial calculations related to the energy production of a standard 20 kW photovoltaic plant connected to the electric network and located in Ivory Coast (Côte d’Ivoire). Its economic profitability in terms of economic returns of the electricity production is calculated by using capital budgeting techniques. It is demonstrated that when photovoltaic plants are considered as economic assets, the knowledge of financial and economic characteristics of the country as well as the geographical localization of photovoltaic plants, have to be taken into account in order to assess the profitability of the investment. The Levelized Cost of the Energy generated for the photovoltaic plant during its expected time of operation (25 years) is calculated and compared with other economical parameters.Keywords: photovoltaic energy production, solar energy investments, capital budgeting, net present value, profitability, levelized cost of energy, Ivory Coast. Production d'énergie et analyse financière d’une installation photovoltaïque en Côte-d’IvoireUn facteur clé pour stimuler la croissance économique dans les pays en développement est l'indépendance énergétique de ces pays. Les énergies renouvelables sont bien appropriées pour atteindre un tel objectif, même si la vulgarisation effective des énergies renouvelables dépend de leur prix de production. L’implantation des panneaux solaires est fortement dépendante à la fois de l’ensoleillement et des données climatiques. Cet article présente les calculs économiques et financiers liés à la production d'énergie électrique d'une installation photovoltaïque de 20 kW standard connectée au réseau électrique et située en Côte d'Ivoire. Sa rentabilité économique en termes de retour sur investissements de la production d'électricité est calculée en utilisant la méthode du capital budgétisé. Il est démontré que quand on considère des installations photovoltaïques comme des atouts économiques, la connaissance des caractéristiques financières et économiques du pays aussi bien que la localisation géographique de l’implantation, doivent être pris en compte pour évaluer la rentabilité de l'investissement. Le coût de l'énergie produite par l'installation photovoltaïque pendant sa durée opérationnelle (25 ans) est calculé et comparé avec d'autres paramètres économiques.Mots-clés: production d'énergie photovoltaïque, énergie solaire, investissement, budgétisation, capital, rentabilité, coût moyen actualisé de l'énergie, Côte d'Ivoire

Production d'énergie et analyse financière d’une installation photovoltaïque en Côte-d’Ivoire

One key factor for boosting economic growth in developing countries is the energetic independence of the countries. Renewable energies are well suited for such purpose even if effective dissemination of renewable energies is their production price. The energy production of solar plants is highly dependent of both sun radiation and climate data and therefore dependent of their location. This paper reports on the economic and financial calculations related to the energy production of a standard 20 kW photovoltaic plant connected to the electric network and located in Ivory Coast (Côte d Ivoire). Its economic profitability in terms of economic returns of the electricity production is calculated by using capital budgeting techniques. It is demonstrated that when photovoltaic plants are considered as economic assets, the knowledge of financial and economic characteristics of the country as well as the geographical localization of photovoltaic plants, have to be taken into account in order to assess the profitability of the investment. The Levelized Cost of the Energy generated for the photovoltaic plant during its expected time of operation (25 years) is calculated and compared with other economical parameters.Guaita Pradas, I.; Marí Soucase, B.; Boko, A. (2015). Energy production and financial analysis of photovoltaic energy plants in Ivory Coast. Afrique SCIENCE: Revue internationale des sciences et technologie. 11(2):24-34. http://hdl.handle.net/10251/60835S243411

Management improvement of the supply chain of perishable agricultural products by combining the Scor model and AHP methodology. The ecuadorian flower industry as a case study

This research aims to identify and propose an analysis and redesign methodology for Supply Chain (SC) processes, leading to better performance and financial results. Our study focuses on the Ecuadorian flower industry redesigning processes and allowing higher levels of competitiveness. The methodology here proposed combines the SCOR (Supply Chain Operation Reference) and a Multi-Criteria Evaluation methodology, the Analytic Hierarchy Process (AHP). The SCOR model allows mapping and describing the supply chain. By consulting with experts, the AHP helps examine and select decisive chain operational aspects for successful performance allowing redesign. According to the proposed methodology and expert consultation, those metrics, attributes, and processes with lower weight, should be improved. Although few research articles have applied the SCOR and AHP models to the agricultural sector, this study on the supply chain of the Ecuadorian floriculture sector leads us to conclude that model combination is a suitable methodology for supply chain analysis of any perishable product and, more specifically, the flower industry. Highlights Supply chain (SC) management is a crucial and decisive element in improving efficiency, productivity, and overall distribution and sale process. In perishable and temperature-sensitive products, like flowers, supply chain management (SCM) is imperative for avoiding financial losses. SCOR (Supply Chain Operation Reference) is a good model to measure SC performance. AHP helps examine and select decisive chain operational aspects for successful performance allowing redesign.This research aims to identify and propose an analysis and redesign methodology for Supply Chain (SC) processes, leading to better performance and financial results. Our study focuses on the Ecuadorian flower industry redesigning processes and allowing higher levels of competitiveness. The methodology here proposed combines the SCOR (Supply Chain Operation Reference) and a Multi-Criteria Evaluation methodology, the Analytic Hierarchy Process (AHP). The SCOR model allows mapping and describing the supply chain. By consulting with experts, the AHP helps examine and select decisive chain operational aspects for successful performance allowing redesign. According to the proposed methodology and expert consultation, those metrics, attributes, and processes with lower weight, should be improved. Although few research articles have applied the SCOR and AHP models to the agricultural sector, this study on the supply chain of the Ecuadorian floriculture sector leads us to conclude that model combination is a suitable methodology for supply chain analysis of any perishable product and, more specifically, the flower industry. Highlights Supply chain (SC) management is a crucial and decisive element in improving efficiency, productivity, and overall distribution and sale process. In perishable and temperature-sensitive products, like flowers, supply chain management (SCM) is imperative for avoiding financial losses. SCOR (Supply Chain Operation Reference) is a good model to measure SC performance. AHP helps examine and select decisive chain operational aspects for successful performance allowing redesign

Numerical Simulations on Perovskite Photovoltaic Devices

Organometal halide perovskites have recently attracted tremendous attention due to their potential for photovoltaic applications, and they are also considered as promising materials in light emitting devices. In particular, in the last years promising photovoltaic devices with efficiencies above 20% have already been prepared using organometal halide perovskites as absorbent materials

Endorse of renewable energy plants, still an alternative investment in Spain?

All the academic submissions on SOP are free to all. People can read, copy, distribute and even download the latest research outcome on various devices, including smart phones, notebooks, pads, Kindles, desktop PC, etc. SOP welcomes every individual researcher and institution to submit or read the first-hand scientific information.[EN] The development of renewable energy technologies depends on two main factors: progress of the related technologies and incentive policies. Long-term incentive policies are essential to achieve progress and spreading of clean energies. However, this scenario is not always met and in some countries some confusion emerge owing to the lack of stable incentive policies. This paper deals with the financial and economical analysis of a standard investment in renewable energy photovoltaic systems in Spain. Main investment parameters related to photovoltaic solar energy plants in Spain during the last decade have been analyzed. Net present value, payback and internal rate of return of a typical 20 kWp photovoltaic solar plant have been calculated in the frame of the recent history of energy policies in Spain. Despite the high variations of incentive policies withdrawn by renewable energy plants, we demonstrate that the evolution of related technology and market has been able to surpass the absence of long-term policies and even nowadays the photovoltaic systems can still be considered as a profitable investment from the economic point of view.This work was supported by European Commission through grant NanoCIS (FP7-IRSES ref. 269279).Guaita Pradas, I.; Marí Soucase, B. (2014). Endorse of renewable energy plants, still an alternative investment in Spain?. SOP transactions on economic research. 1(2):1-9. https://doi.org/10.15764/ER.2014.02001S191

Livestock valuation: an assessment model based on sow age

[EN] Food supply in Europe is based on the consumption of meat ¿ of which pork is the most consumed. The livestock sector represents some 40% of total agricultural production. Livestock farms need tools for business management and valuation in order to make business productivity estimates and determine compensation, as well as calculate average and marginal costs. Pig farmers need to determine the optimal time for culling a sow: meaning that for livestock depreciation it is necessary to determine the value of sows depending on their age. In this study, a model is shown for valuing a sow according to its productive life and net present value generated. In the same way as any asset in a production process, the economic value of a sow should be estimated by its contribution to the process of generating future profits. The distribution of costs depends on the size of the farm, and so three sizes of farms are considered: fewer than 250 hybrid sows; 251 to 500 sows; and more than 500 sows. The economic values of the sows were obtained according to their age and number of farrowing. The models show variations between differently sized farms.Guaita-Pradas, I.; Pérez-Salas Sagreras, JL.; Fenollosa Ribera, ML. (2017). Livestock valuation: an assessment model based on sow age. Ciência e Técnica Vitivinícola. 32(8):299-323. http://hdl.handle.net/10251/109828S29932332

Drovers Roads as Environmental Assets: Use Value for Recreational Purposes of the Cañada Real del Reino de Valencia

[EN] Drovers’ roads have been a key part of transhumant pastoralism for decades, being the routes on which to drive livestock, and it is for this reason that they are protected by Spanish law, specifically Law 3/1995, by which they were declared public goods. At the same time, their particular nature also means that they also possess characteristics which are typical of other types of public goods; therefore, in order to estimate their value, market-based techniques cannot be used. This study centres on a project for the restoration for recreational purposes of the Cañada Real del Reino de Valencia, a drovers’ road in the Valencia region of Spain. In order to establish its economic value, the contingent valuation method has been used: this is the most commonly used technique for the valuation of non-market goods and it is widely attested in the economic literature, being used in a large number of different settings. Assuming a useful life of 25 years and a social discount rate of 5%, the value of the Cañada Real del Reino de Valencia has been estimated at €441.82 million, indicating the value which society places on the drovers’ road. This estimation may assist in improving the efficiency of public spending policies.The translation of this paper was funded by the Universitat Politècnica de València, Spain.Guaita Pradas, I.; Segura García Del Río, B. (2014). Drovers Roads as Environmental Assets: Use Value for Recreational Purposes of the Cañada Real del Reino de Valencia. Journal of Environmental Protection. 5(16):1495-1508. doi:10.4236/jep.2014.516142S1495150851

La dependencia energética en España por sectores y su impacto económico

[ES] Este artículo describe la situación histórica de España frente a la dependencia energética y la evolución en los últimos años. Se analiza la dependencia energética en función de los diferentes sectores, en concreto el sector industrial, el transporte y el de usos diversos donde estarán incluidos la Agricultura, Pesca, Comercio, Servicios y Administraciones Públicas, el Residencial y otros. A partir del análisis del mix de consumo energético de cada uno de los tres sectores objeto del estudio, se realizarán una serie de propuestas para reducir la dependencia energética en los mismos, comprobando los importantes beneficios económicos directos que tendrán para la economía española. Este estudio permite concluirde que con una correcta planificación a medio y largo plazo, se pueden poner en marcha medidas encaminadas a la reducción de la dependencia energética y que a su vez sean menos contaminantes, sin que ello tenga un coste adicional en nuestra economía. En este estudio solo se han considerado los beneficios directos por el ahorro de los intereses para financiar las importaciones de energía que se evitan, sin tener en cuenta el ahorro en los bonos de emisión de CO2, los beneficios medioambientales, o la generación inducida de empleo y riqueza que se desprenderían de la puesta en marcha de las acciones propuestas y de una mayor utilización de fuentes de energía propias.Este trabajo ha sido parcialmente financiado por la Generalitat valenciana en el marco del proyecto Prometeus 2014/044.Galdón-Ruiz, JA.; Marí, B.; Guaita Pradas, I. (2016). La dependencia energética en España por sectores y su impacto económico. Técnica Industrial. (314):46-55. http://hdl.handle.net/10251/84250S465531

Análisis del sistema eléctrico español

[EN] An electrical efficient system should present a balance between the principal factors that it has to fulfil. They are the reliability and guarantee of supply, it must also be clean and low in emissions, and cost-efficient and with a high index of self-supply. In this article the four factors indicated for the electrical Spanish system will be analised, and we will be able to verify the enormous imbalance that it presents. It is an oversized and very trustworthy system, which has improved very much with regard to emissions and the energetic dependence, but it is very expensive and unviable at present. This fact has to take to us to the deep reflection on the changes needed to obtain the objectives pursued, which, without any doubt, will have to suffer a medium-long term planning.[ES] Un sistema eléctrico eficiente debería presentar un equilibrio entre los factores principales que ha de cumplir, que son la fiabilidad y garantía de suministro, que sea limpio y bajo en emisiones, que sea económico y que tenga un alto índice de autoabastecimiento. En este artículo se analizarán los cuatro factores indicados para el sistema eléctrico español, y podremos comprobar el enorme desiquilibrio que presenta, dado que tenemos un sistema sobredimensionado y muy fiable, que ha mejorado mucho respecto a las emisiones y la dependencia energética, pero que es muy caro e inviable en la actualidad. Este hecho nos ha de llevar a la reflexión profunda sobre los cambios que han de producirse en el mismo, para conseguir los objetivos perseguidos, y que indudablemente tendrán que pasar por una planificación a medio-largo plazo.Galdón-Ruiz, JA.; Guaita-Pradas, I.; Marí, B. (2017). Análisis del sistema eléctrico español. Tecnica Industrial. (316):50-63. doi:10.23800/8866S506331