Macroeconomic Efficiency of Photovoltaic Energy Production in Polish Farms

Abstract

The public’s awareness of threats to the natural environment, as well as the hazard to human lives and health posed by the use of fossil fuels to generate energy has resulted in the growing interest in renewable energy sources, thus promoting attempts to reduce the dependency on conventional energy sources. Among the former, solar energy is one of the most promising. The aim of this study is to assess the macroeconomic efficiency of investments in photovoltaic installations to meet the demand for electricity of farms and agricultural production. Calculations were prepared for 48 variants comprising three farm types (dairy farms, field cropping farms, and mixed production farms), as well as 16 locations throughout Poland. The obtained results indicate high efficiency of electricity production using photovoltaic installations to cover the needs of farms in Poland. In macroeconomic accounting, NPV ranges from EUR 8200 to almost EUR 23,000, with the payback period depending on the farm type ranging from 4.3 up to 6 years, while the internal rate of return amounts to 21–32%. Increasing the scope of investments in photovoltaics (PV) to cover the electricity demand not only of the household, but also of the agricultural production leads to improved economic efficiency of energy production both in the macro- and microeconomic terms.

Analysis of the Impact of the Level of Self-Consumption of Electricity from a Prosumer Photovoltaic Installation on Its Profitability under Different Energy Billing Scenarios in Poland

“…The authors of [26] pointed out in their analyses the significant impact of energy self-consumption and government subsidy levels on the NPV ratio and payback time of high-power PV systems in Italy, with billing mechanisms for energy sold at an annual price. On top of this, PV system designs are characterised by low coefficients of variation and low investment risk, with high NPV and profitability indexes (PI) [27], and are particularly cost-effective in areas with high current demand, such as farms [28]. The power of the PV micro-installation is also important for changing the NPV, depending on whether the system is designed to supply 100% of the energy for the house in the first or last year of the system's operation [29].…”

Influence of Photovoltaic Development on Decarbonization of Power Generation—Example of Poland

“…For the reasons outlined above, the topic of using PV micro-installations to produce electricity is a timely and interesting topic in many ways. Many researchers are conducting research on the cost-effectiveness of using PV micro-installations [34,35] and the feasibility of their use in different conditions [36,37]. These studies are conducted in different countries, e.g., Sweden, Italy, and Switzerland, which take into account the specificities of these countries [38][39][40].…”