3.5.6. Net Present Value (NPV)

The Net present value of the solar project can be calculated [35] using Equation (14):

$$NPV = \sum\_{n=1}^{30} \cdot \frac{113.38 - 2302 + (900) \cdot (0.133)}{(1 + 0.0055)^n} \tag{18}$$

where,

*Sn* = reduction in annual energy costs due to solar energy self-consumption = 652 kWh × unit rate assuming (24-h rate of 17.39 cent per kWh); 652 × 0.174 = €113.38

*Cn* = year 1 (Table 4 includes cost of PV Modules, Inverters, Miscellaneous Costs, Annual operation, maintenance and insurance = €2302, for subsequent years costs are only annual operation, maintenance and insurance = €50; cost of replacement inverter in year 12 = €920).

$$NE\_n = 900$$

*t* = €0.133 (assuming t equal to retail rate (r) €0.133 per kWh in case of net metering) *d* = 0.55%

Approximately 44,354 kWh (42%) annual solar PV electricity generated by the project was self-consumed and the remainder (58%) 61,250 kWh available for the grid. This represents 652 kWh usage and 900 kWh for export for each residential unit.

*NPV* of the investment = −€1918.52 and no of years for financial payback = 12 years.


**Table 4.** Key cost assumptions of the solar PV system for the project.

The SEAI gran<sup>t</sup> level are subject to change and the above total amount excludes the annual rate of inflation (0.73%) and VAT (13.5%) [40].
