Impact of variable economic conditions on the cost of energy and the economic viability of floating photovoltaics

Abstract

This work evaluates the effects of economic conditions’ variations on the costs and viability of floating photovoltaics, a novel solution where modules are installed on or above water. A sensitivity analysis of key economic criteria is conducted across multiple European countries, first generating country-specific baseline scenarios and then introducing systematic variations into the input parameters. The results show that capital expenditure and electricity prices, which have both experienced significant variations in recent years, have the largest influence on the net present value and the internal rate of return. Similarly, capital expenditure and discount rate are found to be the most influencing factors for the levelized cost of electricity. Overall, this study contributes to the literature by identifying the correlations between the economic variables and the viability of floating photovoltaics. The findings can be used to assess the effectiveness of potential government policies and support mechanisms and to evaluate the viability of this technology under varying national and international economic conditions.

Keywords

• Floating photovoltaics
• Economic analysis
• Cost analysis
• Sensitivity analysis
• LCOE
• NPV