Feasibility of Solar Energy
Pp. 111-183 (73)
Ghada Abdel Aziem, Khaled Nassar and Salah El-Haggar
A model is developed to study the economic feasibility of adopting two
kinds of solar technologies namely; solar water heaters and photovoltaics to substitute
traditional systems in the residential sector. The model is a decision support system tool
that guides investors and decision makers on the optimal scheme to utilize their funds
and maximize the return on investment using an optimization approach over a duration
of 10 years. The model considers offering a subsidy to support the diffusion of the
systems through an initial fund of $1,500,000 in terms of a line of credit. The model
computes the net present worth of the project and the line of credit payback period. In
addition, the model provides annual percentages of the amount of money to be used in
the reinvestment versus the amount used to pay back the line of credit. A case study is
conducted and three proposed scenarios are applied namely; lease, loan and power-cuts
tariff. The results of the study shows that the SWH line of credit payback period for the
Lease, Loan and Power-Cut Tariff are 10, 9, and 10 years while the PV line of credit
payback period for the Lease, Loan and Power-Cut Tariff are 8, 5, and 5 years.
Decision support system tool, Economic challenges, Energy bond,
Feed-in tariffs, Grants, implementation strategies, Lease, Line of credit, Loan, Net
present worth, Optimization, Payback period, Photovoltaic panels, Power cut
tariff, Rebates, Solar energy, Solar water heaters, Subsidy, Sustainable systems
adoption, Tax reduction.
Department of Mechanical Engineering, School of Sciences and Engineering, The American University in Cairo, AUC Avenue P.O. Box 74, New Cairo 11835, Egypt.