Economic evaluation of grid -tied PV technology used in apparel manufacturing industry in Sri Lanka

Abstract

Grid-Tied Photovoltaic (PV) technology is a globally accepted renewable technology used for built environment. Application of grid-tied PV system is a promising alternative and it’s essential that clients know if the investments in such technologies are actually profitable. In Sri Lanka fewer studies were found on the economic evaluation of grid-tied PV technology. In particular, the economics of generating solar electricity has not been addressed appropriately for Sri Lanka’s apparel manufacturing industry. Therefore, aim of this study is to evaluate the economic gain of grid-tied PV technology for apparel manufacturing industry in Sri Lanka to promote its application. The case study approach was adopted as the research strategy and four (04) apparel manufacturing facilities were selected. The data collection was done through semistructured interviews and documentary reviews, whereas the analysis was conducted through manual content analysis and evaluation of economic indicators. Case study data revealed the key economic benefits of the system such as monthly revenue, low maintenance cost, reduce burden on local utility grid, etc. Key economic challenges were identified as high initial cost, high replacement costs, cost due to conflicts with suppliers, revenue depreciation with system losses and the like. Selecting energy service companies, promote bulk purchase and maintain stocks, enhance national solar energy demand, improve the process of renewable energy loan schemes, etc. are the proposed strategies to overcome those challenges. In addition, three (03) economic indicators were measured, such as levelized cost of electricity, net present value and simple payback period. The levelized cost of electricity resulted in a reasonable range for the cost of producing electricity using a solar PV system, ranging between Rs. 10 and Rs. 12 per kilowatt hour (kWh) and simple payback period and net present value showed a favorable condition, implying system’s profitability for apparel manufacturing industry in Sri Lanka.