Investment Decision and Economic Analysis of Distributed Photovoltaic Power Stations

ObjectivesWith the continuous advancement of China’s photovoltaic (PV) industry, the industry is transitioning from being heavily reliant on government policy subsidies to achieving grid parity, which places higher demands on the economic benefits of PV power stations. Consequently, a more comprehensive and detailed study on the investment decision and economic evaluation of photovoltaic power stations is conducted.MethodsInvestment decision guidance for a 4.45 MW distributed PV power station project is provided from multiple aspects, including site solar resource analysis, solar module selection, and inverter selection. By calculating the construction investment and revenue, economic analysis of the project is conducted, and the effects of construction investment, operating costs, power generation price, and power generation output on the project’s economics are studied.ResultsThe economic analysis reveals that the project achieves an after-tax financial internal rate of return (FIRR) of 7.43%, with an after-tax investment payback period of 11.39 a. For equity capital, the FIRR is 11.43%, and the payback period is 10.38 a.ConclusionsThe project offers favorable economic benefits and the project economics is most sensitive to changes in electricity prices. Furthermore, the project demonstrates strong resilience to risks. The research results can provide theoretical reference and engineering guidance for the research and application of PV projects.