Analyzing Profitability and Discount Rates for Solar PV Plants. A Spanish Case
| Autor: | Ana Blasco-Ruiz, Inmaculada Guaita-Pradas |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2020 |
| Předmět: |
net present value
capital asset pricing model Natural resource economics Capital asset pricing model 020209 energy Geography Planning and Development TJ807-830 sector’s historical return Cost of equity 02 engineering and technology Sector's historical return 010501 environmental sciences Management Monitoring Policy and Law TD194-195 01 natural sciences Renewable energy sources cost of equity 0202 electrical engineering electronic engineering information engineering Capital cost GE1-350 Solar power 0105 earth and related environmental sciences Environmental effects of industries and plants Renewable Energy Sustainability and the Environment business.industry Net present value Photovoltaic system Cost of capital Renewable energy Environmental sciences 16.- Promover sociedades pacíficas e inclusivas para el desarrollo sostenible facilitar acceso a la justicia para todos y crear instituciones eficaces responsables e inclusivas a todos los niveles ECONOMIA FINANCIERA Y CONTABILIDAD Profitability index Business cost of capital |
| Zdroj: | Sustainability Volume 12 Issue 8 RiuNet. Repositorio Institucional de la Universitat Politécnica de Valéncia instname Sustainability, Vol 12, Iss 3157, p 3157 (2020) |
| ISSN: | 2071-1050 |
| DOI: | 10.3390/su12083157 |
| Popis: | The widespread use of renewable energy sources and the growing concern about climate change, together with Spain&rsquo s exceptional weather and solar radiation conditions, have led to an increase in the use of photovoltaics for energy production in the country. Solar power generation has been tightly regulated, although the legal framework has changed frequently over the years. When assessing the potential financial performance of any business venture, legal as well as financial aspects must be considered, but a critical factor is the discount rate used, which must reflect the company&rsquo s capital cost. Other factors are the period of interest, the firm&rsquo s activity, market risk, and the level of debt of firms in the sector. The main objective of this study is thus to estimate the discount rate for companies using photovoltaics to produce solar power. We calculate it by employing two financial techniques: capital asset pricing model and historical return analysis. We then evaluate the investment in a photovoltaic plant with a capacity of 5000 kW located in eastern Spain, assuming it started its activity in different years which coincide with changes in the regulatory framework. The results show the relevance of the initial outlay costs for the profitability of photovoltaic power plants. |
| Databáze: | OpenAIRE |
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