A comparative cost analysis of electricity produced

by a diesel and a solar-PV generation system for an

energy load located in Chimbote, Ancash-Perú.
Johnny Nahui-Ortiz, Ph.D.1, Dr. Serapio Quillos-Ruiz2, Nelver Escalante-Espinoza2, and Dr. Freedy Sotelo-Valer1
National University of Engineering, Peru, jnahuio@uni.edu, fresov@uni.edu.pe
1
2
Universidad Nacional del Santa, Perú, squillos@uns.edu.pe, nescalante@uns.edu.pe

Abstract– In this research work, a comparative cost analysis of

electricity produced by a non-renewable and a renewable energy II. BACKGROUND
system is carried out. A 165.4-kWh daily electric load is established According to Ref. [01], HOMER stands for Hybrid
on the basis of a community-type profile, with a 20.5-kW peak load
Optimization Model for Electric Renewables. Midwest
and a load factor of 0.34.
Using simulation built-in features from HOMER Pro, Research Institute has the copyrights of this software. It was
optimum sizing for both a diesel-based system and a solar developed by National Renewable Energy Laboratory (NREL)
photovoltaic system is carried out. A proposed non-renewable of United States. It is used to help the designing of various
energy supply alternative consists of a 23-kW diesel generator, a power plant configurations. It has different built-in
40-kWh storage capacity, and a 5.8-kW DC-AC converter. On the components in it such as PV panels, Wind turbines, Utility
other hand, a proposed renewable energy supply alternative loads of various kinds, Generators, Converters and Battery
consists of a 131-kW solar PV generation, a 427-kWh storage Backup etc. It is used to simulate various schematics of power
capacity, and a 24.7-kW DC-AC converter. plants and then those schematics are simulated to find most
A levelized cost of electricity (LCOE) approach is used for
optimized power plant configuration with respect to operating
comparison purposes. Also, net present cost (NPC) is calculated for
the proposed energy supply alternatives. cost, net present cost (NPC), gases emission and economic
It is concluded that for comparative cost analysis key aspects, comparison etc. The demand of electricity is increasing
such electric load profile and its correlation with solar radiation throughout the world. Needed to design some innovative new
availability on hourly basis, play a significant role. However, the renewables energy systems which can decrease the
incorporation of environmental benefits could overcome some dependence on conventional energy resources. Analyzing
economic feasibility barriers in the near future. different cases and according to these cases we can evaluate
their power generation, pollutant gases emissions, net present
Keywords—Renewable Resources, Clean Energy, Cost cost and average electrical production cost are estimated using
Analysis, Environmental Sustainability. HOMER Pro software.
According to Ref. [02], the article contains the average
I. INTRODUCTION daily electric load pro- file (for 24 h of the day) for the five
categories of residential buildings (duplex, single family
Energy supply based on renewable resources is gaining an bungalow, traditional court yard, flat/apartment dwelling and
increasing attention worldwide. According to different ‘face-me-I-face-you’) in Nigeria. In each one, 10 buildings per
references, Peru is considered to have high solar radiation residential building type were surveyed for the collection of
levels compared to other regions in the world. Also, prices for data with the aid of a questionnaire. In each surveyed
fossil fuels in Peru are considered similar to international household, a household member completed the energy audit
levels if not slightly higher. Besides, environmental concerns section of the questionnaire with the assistance of the
associated with the use of fossil fuels for electricity supply, in questionnaire administrator while the section of the
locations not yet connected to main electric grid, are getting questionnaire designed as a time-of-use diary was left with the
more attention in many regions. household for completion. For each building surveyed, the
In this research work, a reference electric load located in data retrieved from the completed time-of-use diary was used
Chimbote-Ancash will be considered for simulation purposes. in Microsoft Excel for computing the hourly electricity load
Ancash region is located on the northern coastal region of profile for the seven days of the week. In order to obtain the
Peru. hourly energy load (in watts) for each building, the power
rating of the appliances used during each of the 24 h of the day
was summed and the result in watts was converted to kWh by
dividing by 1000. Each dwelling’s daily load profile was
obtained as an average of the load profile for the seven days of
the week. The article as well provides data on the solar
Digital Object Identifier (DOI): photovoltaic systems’ components designed to supply
http://dx.doi.org/10.18687/LACCEI2021.1.1.377 electricity to the building and the levelized cost of electricity
ISBN: 978-958-52071-8-9 ISSN: 2414-6390

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social development" "Leveraging emerging technologies to construct the future", Virtual Edition, July 19 - 23, 2021.
(LCOE) of the systems for the base case scenario and different programs in many countries. These systems are invariably
sensitivity cases obtained from simulations using HOMER provided with battery energy storage (BES) for using stored
Pro. The load profile data provided in this article can be electricity during nighttime. Availability of bi-directional
reused by other researchers in the design of solar photovoltaic power electronic converter promises to enhance application of
systems for residential buildings. these SA-SPV systems for generating, storing and feeding
According to Ref. [03], the study evaluated the outcome electricity to local micro-grids. Further, the advantages of such
differences when adopting five different solar irradiation systems can be maximized by minimizing energy losses at
databases on the sizing of hybrid solar photovoltaic-diesel different sub-system levels in the system. In the present work,
generators designed to supply electricity to isolated mini- we demonstrate use of HOMER Pro simulation software for
grids. To do this, the two most widely adopted photovoltaic simulation of energy performance of SA-SPV (6.75 kWp)
(PV) simulation packages in the market, namely PVsyst® and system installed in Renewable Energy Systems Laboratory in
HOMER Energy® were used. The different origins, data our Institute, aiming at quantitative estimation of energy losses
timespan, space and time resolution, of the five most relevant due to stand-alone mode of operation. The system is provided
solar irradiation databases available for the region were with battery energy storage (800 Ah) that is used for supplying
compared. A case study was presented to illustrate the electricity for night time street lighting on campus up to
influences of the solar irradiation database and the solar eleven hours per day. The results of simulation show that
simulation tool on the resulting PV generator. Furthermore, when the existing SA-SPV system is upgraded to grid-tied
the hourly behavior of the energy supply to an existing load in SPV system, by incorporating bi-directional converter, the
a mini-grid in the Brazilian Amazon was evaluated, together system will produce total 11086 kWh annually at the site, out
with the savings in diesel obtained with the resulting PV of which 4536 kWh will be fed to the local single-phase
generator. Evaluating the five options of solar radiation micro-grid, which accounts for energy lost if the system
databases, for the same PV plant configuration, variations of continues to operate as SA-SPV system.
up to 19.7% were found in the expectation of PV generation. According to Ref. [06], the interest of power is expanding
When the simulation software package was varied, the step by step all through the world. Because of constrained
combined effect (radiation database X PV system sizing tool) measure of fossil fuel, it is vital to outline some new non-
showed differences of up to 20.6%. This demonstrates that renewable energy frameworks that can diminish the reliance
despite having different algorithms, computational tools have on ordinary energy asset. A hybrid off-grid renewable energy
a small influence (less than 1%) on results. These combined framework might be utilized to reduction reliance on the
differences, taking into account the load curve behavior and traditional energy assets. Advancement of crossover
the total diesel generation capacity installed at the site, framework is a procedure to choose the best mix of part and
resulted in over 100% differences in the optimum PV their cost that can give shabby, solid and successful option
generator size in the case study. The total savings in diesel energy resource. In this framework, the essential wellspring of
fuel, over a 15-yr period, ranged from $ 6.5 million to over $ power is sun based solar photovoltaic system and biomass
16 million (> 2.5 times) for the smallest PV system. This gasifier generator set while fuel cell and batteries are utilized
demonstrates the importance of the correct choice of database. as reinforcement supply. HOMER simulator has been utilized
These evaluations can be extended to mini-grids of any size to recreate off the grid and it checks the specialized and
elsewhere. The novelty and originality of this study is to financial criteria of this hybrid energy system. The execution
demonstrate and quantify for the first time the influence of the of every segment of this framework is dissected lastly delicate
solar radiation database and the PV simulator package on the examination has been performing to enhance the mixture
sizing of PV-diesel generators. The consequences of this study framework at various conditions. In view of the recreation
are not only of scientific and academic importance, but of result, it is found that the cost of energy (COE) of a biomass
economic and commercial interest as well. gasifier generator set, solar PV and fuel cell crossover energy
According to Ref. [04], this research proposes, through system has been found to be 15.064 Rs/kWh and complete net
HOMER, to evaluate the technical and economic feasibility of present cost Rs.51,890. The abundance power in the proposed
a hybrid energy system, taking advantage of solar and wind framework is observed to be 36 kWh/yr with zero rates unmet
resources in a remote community in Haiti. Several electrical burden.
configurations were analyzed, the most viable has a net According to Ref. [07], it shows the approach to the
present cost (NPC) of US$ 389,647 and US$ 0.497/kWh of design aspects of a hybrid energy system that will target
energy cost (COE). It could produce 82,124 kW h/yr and 0% educational institutes. The purpose of this work is the
of unmet annual load. This configuration still has 9.6% excess computation, simulation & optimization of hybrid energy
electricity, which is important for a possible increase in load. system. The hybrid energy system comes from the biomass
A sensitivity analysis was performed, which shows the gasifier generator set, solar and fuel cell with battery storage
performance and technical feasibility of the system for future system to fulfill partially load requirement of Energy Centre,
load increase. MANIT Bhopal. The computation software used for this work
According to Ref. [05], stand-alone solar photovoltaic is HOMER Pro 3.2.3. HOMER Pro is a design simulation
(SA-SPV) systems are attractive option for rural electrification model that analyzed the sizing, costing optimization and

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social development" "Leveraging emerging technologies to construct the future", Virtual Edition, July 19 - 23, 2021. 2
control strategy of the hybrid energy system. The analysis of potential correlation, or not, in time with a locally available
such hybrid energy systems feeding AC primary load of 101 renewable energy source.
kWh/day energy consumption with a 5-kW maximum load
demand. The simulation results show that optimized size of B. Project lifetime and economics
components, biomass gasifier (5 kW) – solar (5 kW) – fuel Project lifetime must be established in order to assess
cell (5 kW) and optimized cost of energy about 15.064 economic feasibility and for comparison purposes among
Rs/kWh. alternative proposals. Usually, project lifetime is considered
around 15-25 years.
III. METHODOLOGY
A key indicator that is used for comparison purposes is
A proposed methodology for this study is based on the Levelized Cost of Electricity (LCOE) and it can be
determination of local electric demand, considerations for calculated as follows:
project lifetime and economics, sizing of a diesel system, and
sizing of a solar PV system, followed by a comparison of LCOE = (CAPEX-A + OPEX) / E (3)
electricity generation cost.
where:
A. Electric Power and Energy Demand
It is rather important to distinguish between Power and LCOE = levelized cost of electricity (US$/kWh)
Energy requirements. Therefore, with regard to electricity CAPEX-A = capital expenditure (US$/yr)
demand, it must be established in terms of “instantaneous” OPEX = operational expenditures (US$/yr)
electrical power (kW) required over time (hours) on a daily E = electricity produced (kWh/yr)
basis. A load profile for electric power demand would
normally include seasonal and scale variations over a year, It should be noted that replacement cost of certain
and the upcoming years. components could be incorporated as additional CAPEX that
For a particular time-period of the day, “cumulative” is expected to take place, at a later time, during the project
electric energy demand may be calculated as: lifetime.
Normally, CAPEX figures are not expressed on a yearly
E=Pxt (1) basis but rather on a total cost at the beginning of project
lifetime. However, a CAPEX value could be expressed on a
where: yearly basis by:

E = electric energy (kWh) CAPEX-A =CAPEX x [i x (1+i)n/(1+i)n-1] (4)

P = electric power (kW)
t = time period (hours) where:

Therefore, required electric energy can be calculated on a CAPEX = capital expenditure (US$)
daily basis and expressed in terms of kWh/day. i = discount rate (no units)
For a particular daily electric energy demand, a load n = project lifetime (years)
factor can be calculated as:
With regard to discount rates, the following relationship
LF = DEE / (MED x 24 hours) (2) applies:

where: NDR = DRD + EIR + DRD x EIR (5)

LF = load factor (no units) NDR = nominal discount rate (no units)
DEE = daily electric energy demand (kWh/day) EIR = expected inflation rate (no units)
MED = maximum electric power demand (kW) RDR = real discount rate (no units)

In classic electric systems, main criteria for sizing usually C. Diesel-based Generation System
include the maximum electric power demand (kW), even if it Diesel-based generation systems are usually capable of
may only take place once in a while or even if it is expected to supply an entire electric demand managing several variations
take place only several years ahead. However, when dealing of power demand over time. However, manufacturers
with off-grid systems and required storage capacity, energy normally specify a minimum load for operation, therefore a
demand (kWh) plays a critical role for properly sizing a storage system should be incorporated for off-grid
system. Also, load profile plays a critical role considering its applications. Also, a DC-AC converter would be needed in
order to handle the stored energy.

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 Basically, overall system cost should include CAPEX and TABLE I
REFERENCE ELECTRIC LOAD
OPEX figures. CAPEX values are referred to diesel generator,
Hour kW Hour kW Hour kW
storage system, and DC-AC converter purchase, including 0 2 8 8 16 9
installation costs. OPEX values include not only operation and 1 2 9 8 17 10
maintenance cost but also fuel cost which in a few cases tend 2 2 10 8 18 12
to be a key aspect. Equipment lifetime must be considered in 3 2 11 8 19 12
order to properly determine required replacement costs over 4 2 12 8 20 12
project lifetime. 5 3 13 8 21 12
6 5 14 8 22 9
D. Solar Photovoltaic Generation System 7 7 15 8 23 5
Electricity produced by solar photovoltaic (PV) systems is On the basis of above initial data, a daily load of 170 kWh
directly correlated to local solar radiation availability. It is would be obtained, along with a peak load of 12 kW, and a
anticipated that solar radiation will certainly have different load factor of 0.59. However, in order to capture anticipated
values for each month of the year, and it will even be different and more realistic patterns, HOMER Pro introduces Random
from day to day. Therefore, it is required to establish a daily Variability features such as 10% of day-to-day (size varies but
solar radiation (W/m2) availability over time (hour). It should profile shape remains constant) and 20% of timestep (size
be noted that renewable energy resource availability may or remains the same but profile shape varies). After considering
may not necessarily correlate with electric energy demand not those Random Variability factors, updated load profile
even in average values and certainly nor in occurrence over a indicates a daily load of 165.44 kWh, a peak load of 20.46 kW
24-hr period. Actually, solar energy most likely would only be and a load factor of 0.34, which will be used in this study for
available at most from 06h00 to 18h00. simulation purposes.
Basically, solar PV electricity production will vary during
the day as a function of solar radiation. Nominal PV capacity B. Project lifetime and economics
is expressed in terms of kWp which refers to electric power to Considering local financial context, for this particular
be produced by the PV modules only if they receive a solar case, a nominal discount rate of 12% and an expected inflation
radiation of 1 kW/m2. An energy storage system is required in rate of 2% are considered. Therefore, a real discount rate of
order to supply electricity during night time and other intervals 9.8% would apply.
of solar resource unavailability. Also, a DC-AC converter Project lifetime will be considered as 20 years which is
would be needed in order to handle the stored energy. considered as an average reference compared to renewable
For solar PV systems, CAPEX values are referred to solar energy projects in the country.
PV modules, storage system, and DC-AC converter purchase,
including installation costs. OPEX values include only C. Diesel-based Generation System
operation and maintenance cost, and it is usually regarded as a A generic diesel generator is selected using HOMER Pro
low cost, particularly for solar PV modules. Equipment Library. Also, HOMER Pro auto-size feature will be used in
lifetime must be carefully considered in order to properly order to determine optimum capacity. CAPEX is estimated as
determine required replacement costs, particularly for the 500 US$/kW while OPEX is estimated as 0.050 US$/hr. Local
storage system, over project duration. fuel price is considered as 1 US$/liter. Diesel generator
lifetime is estimated as 15000 hours with a minimum load
IV. RESULTS ratio of 20%.
A simulation process has been conducted, using HOMER A generic 1-kWh storage unit is considered. CAPEX is
Pro, considering a reference community-type electric load estimated as 300 US$/kWh while OPEX is estimated as 10
located in Chimbote, Ancash, Peru. US$/yr per unit. A generic 1-kWh storage unit has 12V, and
83.4 Ah of maximum capacity. Lifetime is considered as 10
A. Electric Power and Energy Demand years on the basis of 800 kWh throughput, and minimum state
A reference electric load profile for the year 2021 is of charge is 40%.
considered as follows. Also, a generic DC-AC converter unit is considered.
CAPEX is estimated as 300 US$/kW while OPEX is
considered to have a very low value. Lifetime is considered as
15 years with 95% of efficiency.
According to HOMER Pro algorithm, the following
optimum solution is proposed: a 23-kW diesel generator, a 40-
kWh storage system, and a 5.81-kW DC-AC converter. Fig. 1
shows diesel generation output, energy storage output, and
expected electric load for the period Jan-Dec. 2021. In
general, it is noticed that electric load can be served by a

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suitable combination of diesel generation and energy storage D. Solar Photovoltaic System
throughout the entire year.
In general terms, Peru is considered to have high solar
radiation levels but not in all the regions of the country, as
Diesel Generation (kW) indicated in Ref. [08]. As a reference, Chimbote is located on
the northern coastal area of Peru, with a latitude of 9°3.8’
Energy Storage Output (kW)
South, and a longitude of 78°35.3’ West. Local solar radiation
is estimated on the basis of NASA Prediction of Worldwide
Energy Resource (POWER) database, using monthly averages
for global horizontal radiation over 22-yr period (Jul 1983 –
Jun 2005). Table II shows local solar radiation for the present
study.
Electric Load (kW)
TABLE II
LOCAL SOLAR RADIATION
Clearness Daily Radiation
Fig. 1. Diesel generation output, energy storage output and electric load.
Month Index (kWh/m2-day)
.
Jan 0.473 5.03
Total Net Present Cost for the above system is 340,916
Feb 0.536 5.75
US$ and Levelized Cost of Electricity is 0.6543 US$/kWh. Mar 0.557 5.86
Total cost for the system includes capital, replacement, Apr 0.542 5.35
operating and maintenance, fuel, and salvage for each May 0.537 4.87
component: diesel generator, storage system, and DC-AC Jun 0.519 4.47
converter. For the above system CAPEX is 84,460 US$ and Jul 0.487 4.28
OPEX is 29,484 US$/yr. Aug 0.5 4.74
In the proposed system, 63,195 kWh/yr would be Sep 0.483 4.93
produced with almost no excess electricity compared to Oct 0.477 5.06
Nov 0.478 5.07
required electric load.
Dec 0.506 5.34
Total fuel consumption is 22,604 liters/yr while average Source: NASA data built-in HOMER Pro
fuel consumption is 2.58 liter/hr. The system will operate
5,983 hrs/yr, with a capacity factor of 31.4%, an average Local solar radiation in Chimbote has an average value of
electric output of 10.6 kW, and an average electric efficiency 5.06 kWh/m2-day, with a range from 4.28 kWh/m2-day (in
of 28.4%. Diesel generator is expected to operate with a July) to 5.86 kWh/m2-day (in March).
minimum electric output of 5.75 kW and a maximum electric A generic PV flat plate is selected using HOMER Pro
output of 20.5 kW. Library. For a 1-kWp size, CAPEX is estimated as 1500
The storage system is composed by 40 units of 1-kWh US$/kWp while OPEX is considered as 30 US$/yr. Also, a
capacity with a total usable capacity of 24 kWh. Autonomy is derating factor of 80% for a 20-yr period will be used.
considered as 3.48 hours while expected life is 3.73 years. As before, a generic 1-kWh storage unit and a DC-AC
Energy input is 9,573 kWh/yr while energy output is 7,664 converter unit are select from HOMER Pro Library.
kWh/yr. Annual throughput for the energy storage system is According to HOMER Pro algorithm, the following
8,568 kWh/yr. optimum solution is proposed: a 131-kW solar PV system, a
The proposed system includes a 5.81-kW DC-AC 427-kWh storage system, and a 24.7-kW DC-AC converter.
converter with an average output of 2.28 kW. Capacity factor Fig. 3 shows solar PV generation output, energy storage
is 14.3%, energy input is 7,664 kWh/yr while energy output is output, and expected electric load for the upcoming period
7,281 kWh/yr. In Fig. 2, a basic configuration for the proposed Jan-Dec. 2021. In general, it is noticed that nominal capacity
system is shown. for major components is larger compared to those associated
with a diesel generation system.

Fig. 2. Basic configuration of a diesel-based generation system

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 that, after 15h00, electric load increases while solar irradiation
decreases.
Solar PV Generation (kW)
Storage Output (kW)
kW/m2

Electric Load (kW)

Fig. 3. Solar-PV generation output, energy storage output and electric load. hr
kW
Total Net Present Cost for the above system is 453,294
US$ and Levelized Cost of Electricity is 0.8706 US$/kWh.
Total cost for the system includes capital, replacement,
operating and maintenance, and salvage for each component:
solar PV system, storage system, and DC-AC converter. For
the above system CAPEX is 383,414 US$ and OPEX is
14,136 US$/yr.
In the proposed system, 193,362 kWh/yr would be hr
produced, that is 63.3% of excess electricity compared to
Fig. 5. Daily Solar Radiation (kW/m2) and Electric Load (kW) in March.
required electric load.
The solar PV system has a rated capacity of 131 kWp, an On the other hand, the lowest available solar radiation in
average output of 22.1 kW and 530 kWh/day. Capacity factor Chimbote occurs during September. Fig 6. shows average
is 16.9% and total production accounts for 193,362 kWh/yr. daily values for solar radiation (kW/m2) and electric load
The storage system is composed by 427 units of 1-kWh (kW). It can also be noticed that, after 15h00, electric load
capacity with a total usable capacity of 256 kWh. Autonomy is increases while solar radiation decreases.
considered as 37.2 hours while expected life is 10 years.
Energy input is 37,648 kWh/yr while energy output is 30,199
kWh/yr. Annual throughput for the energy storage system is kW/m2
33,764 kWh/yr.
The proposed system includes a 24.7-kW DC-AC
converter with an average output of 6.89 kW. Capacity factor
is 27.93%, energy input is 63,515 kWh/yr while energy output
is 60,339 kWh/yr.
In Fig. 4, a basic configuration for the proposed system is
shown.
hr
kW

hr
2
Fig. 4. Basic configuration of a solar-PV generation system Fig. 6. Daily Solar Radiation (kW/m ) and Electric Load (kW) in September.

The highest available solar radiation in Chimbote occurs With regard to the proposed system, Fig. 7 shows a
during March. Fig 5. shows average daily values for solar maximum expected electricity excess to be produced on
radiation (kW/m2) and electric load (kW). It can be noticed November 14, 2021 at noon. At that time, electric load would
only be 7.86 kW but solar PV production would be as high as

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social development" "Leveraging emerging technologies to construct the future", Buenos Aires -Argentina, July 21-23, 2021. 6
123.18 kW since solar radiation would also be as high as 1.21 factor of 2.8 kgCO2/liter, it is estimated that 63.3 tCO2/yr
kW/m2. could be avoided.
Solar PV generation would be 123.18 kW, from which Therefore, it is anticipated that subsequent research work
4.19 kW would be used to contribute charging the storage would consider economic benefits associated with positive
system, 8.28 kW would be as input for the DC-AC converter environmental impacts using, for instance, a Life-Cycle
unit, and 110.72 kW would be excess electricity. Considering Assessment approach.
an efficiency of 95%, DC-AC converter output would be 7.86
kW as required by the electric load at that moment. V. CONCLUSIONS

kW On the basis of the findings for this study, the following

conclusion are outlined.

1. Electricity load is a function of both electric power

(kW) and electric energy (kWh) demand. The load
profile plays a significant role when considering the
kW
potential use of renewable energy sources. In this
case, a 20.46-kW peak load must be served with a
34% load factor which means 6.96 kW as average
load.
2. Local solar radiation data plays a key role for sizing
purposes. Commercial software, like HOMER Pro
Fig. 7. Expected electricity excess for November 14, 2021. and others, usually rely on referential databases such
NASA and similar ones; however, actual measured
On the other hand, Fig. 8 shows a maximum unmet data could reveal a different potential for local
electricity expected to occur on August 4, 2021 at 21h00. At resource availability. In this case, HOMER Pro built-
that time, electric load would be 12.02 kW but solar PV in database was used for solar radiation estimation
production would be zero since solar radiation would also be due to lack of local measured data.
zero. Storage capacity would be as low as 170.94 kWh which 3. In general terms, CAPEX figures play a more
is 40% of total capacity, and therefore it would not be significant role for a solar-PV generation system
available for output as stated by the manufacturer compared to a diesel-based generation system. In this
specifications. study, 383,414 US$ and 84,460 US$ respectively.
4. In general terms, OPEX figures play a more
kW significant role for a diesel-based generation system
compared to a solar-PV generation system. In this
study, 29484 US$/yr and 14136 US$/yr, respectively.
5. Carbon dioxide emissions would be avoided if a
solar-PV generation system is implemented instead
of a diesel-based generation system. In this case, 63.3
kW tCO2/yr could be avoided. Future regional carbon
credits may contribute to improve the feasibility of
renewable energy systems.
6. Discount rates may also play a significant role for
cost analysis purposes. Impact of local expected
inflation rates would introduce uncertainty with
Fig. 8. Expected unmet electricity for August 4, 2021. regard to investments in long-term components,
usually associated with renewable energy systems. In
For comparison purposes, the outcoming levelized cost of this study, a conservative estimation of 2% for
electricity will be utilized. For a diesel-based generation inflation rate along with a typical nominal discount
system, LCOE is 0.6543 US$/kWh, and for a solar PV system, rate of 12% would lead to a real discount rate of
LCOE is 0.8706 US$/kWh. In terms of Net Present Cost, for a 9.8%.
diesel-based generation system, NPC is 340,916 US$, and for 7. Project lifetime as well as individual component
a solar-PV generation system, NPC is 453,294 US$. lifetime will also play a significant role in
Therefore, a solar-PV generation system results, in this establishing properly replacement costs, usually for
particular case, 33% more expensive. However, a diesel fossil fuel generators and energy storage systems.
generation system would produce CO2 emissions that could be 8. If cost analysis is carried out for on-grid systems,
avoided by using a solar-PV generation system. Considering a average annual renewable resource availability could

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 be useful; however, for off-grid systems that need to
meet a particular electric demand, renewable resource
availability over time becomes crucial.
9. Excess electricity may be high for certain time period
over the year depending on resource availability and
state-of-charge of storage system, and it contributes
to increase overall generation costs.
10. Levelized cost of electricity is a suitable approach for
cost analysis since it incorporates not only initial
costs but also operational and replacement costs
during project lifetime.
11. Last but not least, further considerations of economic
benefits associated with positive environmental
impacts would certainly contribute to fairly include
additional advantages associated with renewable
energy systems.
ACKNOWLEDGMENT
The authors would like to thank to all the people that in
one way or another have contributed to this work.
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