Financial evaluation-solar energy and photovoltaics

•  Capital costs for passive solar systems can be reduced to a minimum, if their installation is included in the project of a new building. If they get installed on existing buildings, costs are minimal, if they use the already established heating devices, functioning through conventional energy sources.       

Photo voltaic systems

The price of modern photovoltaic systems varies between 6,000 and 10,000 euro per kW of installed power. It depends on the size of the system, equipment characteristics and the installation cost. Other factors, that have influence on the price are equipment suppliers, the type of the building on which the system is to be installed is it a new or an existing building, manufacturer of the equipment, etc.

The average manufacture price of photovoltaic modules is about 4,000 euro per a kilowatt of installed power. Cost for additional equipment and installation of the system can increase the price of the system from 30% up to 100%, These are costs for:

•  Control equipment (inventors, sensors, controllers for accumulators charging etc.)

•  Carrying elements

•  Wiring

•  Switchers and electric protection

•  Accumulators if they are a part of the system

•  Taxes and insurance


Model for assessing the prime cost of 1 kW/h electro energy, produced by photo cells.

•  The main factor that has influence on the photovoltaic solar system productivity is the location. In Southern Europe, Greece or Spain for example sunshine lasts longer and these systems work up to 9 to 10 months annually, while in countries from Central Europe, like Germany , the period of sunshine is reduced to 6 months.

If the system is installed in isolated and remote regions, the prime cost of the produced energy will be more competitive, because of the higher costs for connecting to the grid.

The prime cost of the energy, produced by photovoltaic systems, can be calculated with the following formula:

P = ( C 1/ n + C 2) / Q


T = Duration of sunshine in hours (annually)

p = Prime cost of 1kW/h

C1 = Price of investment

n = Term for device exploitation

c2 = Annual maintenance expenditures

Q = Amount of produced electric energy, during the year (kW/h)

Q = Wp x T

Wp = Installed power

T = Duration of sunshine in hours (annually)





For example, in Spain or Italy, where the duration of sunshine is 2600 hours annually, a photovoltaic system with installed power of 10 kW, term for exploitation 10 years, the price of the investment 60,000 euro, and annual maintenance costs 100 euro, will produce electric energy with the following prime cost:

Q = Wp x T = 10 x 2600 = 26,000 kW/h

P = ( C 1/ n + C 2) / Q = (60,000/10 + 1000)/26,000 = 7000/26,000 = 0.27 euro



N.B. In order to determine the real price for 1 watt of installed power, you should add expenditure for additional equipment and installation of the system to the purchase price and then divide the total by the power of the system.