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.

Keywords

• solar energy
• renewable energy
• social cost
• net present value (NPV)
• discounted payback period
• agrivoltaic