Impact of Cost of Capital on the Financial Viability of Photovoltaic Systems

Objective: The objective is to evaluate the impact of capital cost and the financial viability of a photovoltaic system project through an analysis of the construction of a power plant for energy generation in a Brazilian cosmetics company holding. Theoretical Framework: The study highlights theories on renewable energy sources in Brazil, Distributed Generation, and investment analysis criteria, providing a solid foundation for understanding the research context. Method: The proposed methodology consists of 4 phases, starting with the planning stage, where the problem to be studied is formulated and analyzed. Next, the study is modeled, defining the variables to be analyzed and data collection. In the experimentation phase, calculations and analyses were performed to, in the final stage, assist in decision-making. Results and Discussion: The results revealed that the project is economically viable and that the main variables impacting NPV are the risk and market premium and the energy tariff price. In the risk analysis, it was observed that the project has low risk, and its execution is recommended. Research Implications: The practical and theoretical implications of this research are discussed, providing insights into how the results can be applied or influence practices in the field of Economic Engineering and Sustainability. These implications may encompass investment analysis, renewable energy sources, and project financial viability. Originality/Value: This study contributes to the literature by analyzing capital cost and risk premium in financial feasibility projects in the renewable energy sector. The relevance and value of this research are evidenced by identifying variables that may impact large-scale projects.