Title: Profitability and sustainability of photovoltaic energy plants in Spain

Authors: Inmaculada Guaita-Pradas; Inmaculada Bartual-San Feliu; Bernabé Marí Soucase

Addresses: Departament d'Economia i Ciències Socials, Universitat Politècnica de València, Camí de Vera s/n, 46022 València, Spain ' Departament d'Economia i Ciències Socials, Universitat Politècnica de València, Camí de Vera s/n, 46022 València, Spain ' Departament de Física Aplicada, Universitat Politècnica de València, Camí de Vera s/n, 46022 València, Spain

Abstract: This paper reports on capital budgeting analysis to assess investments in renewable energy photovoltaic systems in Spain. Standard profitability indicators such as net present value, payback time and internal rate of return are applied to such investments. Two main issues have been taken into account: the changes taking place in the recent history of energy policies in Spain as well as the evolution of related technologies. Despite variation in incentive policies, we show how both technology and market have been able to overcome the lack of long-term policies, and even nowadays, photovoltaic energy systems can still be regarded as a profitable investment from an economic viewpoint, even in absence of any kind of incentive.

Keywords: capital budgeting; solar energy investments; net present value; NPV; payback; internal rate of return; IRR; profitability; sustainability; photovoltaic energy plants; Spain; solar power; sustainable development; renewable energy.

DOI: 10.1504/IJSE.2015.071141

International Journal of Sustainable Economy, 2015 Vol.7 No.3, pp.169 - 186

Received: 18 Sep 2014
Accepted: 06 Jan 2015
Published online: 13 Aug 2015 *

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