Technoeconomic Evaluation of Commercial- and Industrial-Scale Solar Plants in Iran Under a New Purchasing Power Agreement (Ppa) Framework: Case of the Yazd Solar Project
Abstract
Mahmoud Taheri and Arash Farnoosh
The solar industry is booming worldwide, providing stable and secure energy and combating environmental threats. Currently, investments in renewable energy are increasingly overtaking investments in all other forms of energy. In this study, the potential for investment in commercial and industrial-scale solar plants in Iran under the new terms of the PPA is assessed. Iran has faced seasonal power deficits and has consolidated renewables to address these imbalances. Therefore, the state ratified regulations for two key market segments—industries and governmental bodies—to adopt renewable energy. The new Iranian PPA guaranteed a feed-in tariff (FiT) for more than 20 years, and to facilitate power transactions, a green trade board platform was introduced within the energy stock market. This platform is dedicated to suppliers and industries for trading electricity with minimal state intervention. Accordingly, in this paper, for the first time, an economic analysis of commercial-scale solar energy is conducted in a new market environment. For this purpose, a case study of a 1 MW solar capacity in YAZD Province under new PPA terms is analyzed. Stochastic studies using Monte Carlo simulations were performed to evaluate the risk factors. The five main key variables change with a triangular basis in 10,000 iterations to provide the probability density function (PDF) of the financial results. The median (P50) of the net present value (NPV) is $1.8 million, and the internal rate of return (IRR) is 25%. The results of this study show substantial economic returns for investors, considering a new market opportunity.
