Dissertation/Thesis Abstract

The Profitability of an Investment in Photovoltaics in South Carolina
by Welsh, Thomas McClain, M.C.S.M., Clemson University, 2017, 142; 10268363
Abstract (Summary)

As renewable energy becomes more prevalent across the United States and the world, solar energy investment has also grown. There have been many studies done on photovoltaic (PV) systems in terms of energy payback and efficiency, but little research done to understand a PV system as a financial investment specific to South Carolina. This study aims to understand the return on investment that a PV system can achieve. More specifically whether PV systems in areas of South Carolina that uses Duke Energy achieve a favorable return on investment and what affects the profitability. This study uses the PVwatts calculator provided by NREL as well as an investment simulation to calculate the Internal Rate of Return (IRR) and Net Present Value on 1024 simulated 5kW PV arrays and evaluates their profitability. It then uses this information to apply it to real case studies for houses in South Carolina. This study found that shade has a significant impact on profitability of investment. At 30% shading, profitability drops near 0% IRR or below. Orientation impacts profitability significantly as well. Panels that are facing south, southeast, and southwest yielded the best return. While north, northeast and northwest orientations yielded very low or negative IRR. East and west facing panels can yield positive financial return, but this return is lower than panels orientated to the south. PV systems oriented towards the east or west must have optimal conditions to remain efficient. This study found that tilt had minimal impact on financially return. Incentives also significantly impacted profitability of investment. For a PV system to be profitable, federal, state, and Duke Energy incentives needed to be applied to the investment. When homes with PV systems are sold also has a great impact on profitability. Research has shown that there is a housing premium for homes with PV systems (Adomatis, 2015). This premium is highest when first installed and declines as the PV systems age. People also associate premiums with houses with PV systems even if the system is not adding much value to the home. This study has also found that the price of the PV system impacts investment. Premium grade panels had significantly less return compared to standard grade panels because prices per watt were higher.

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Indexing (document details)
Advisor: Burgett, Joseph
Commitee: Clarke, Shima, Greene, Daniel
School: Clemson University
Department: Construction Science and Management
School Location: United States -- South Carolina
Source: MAI 56/05M(E), Masters Abstracts International
Subjects: Energy
Keywords: Financial return, Green energy, Internal rate of return, Net present value, Photovoltaics, Solar panels, South Carolina
Publication Number: 10268363
ISBN: 978-0-355-02671-9
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