Economic analysis of production of domestic electricity by roof-top photovoltaic systems in Turkey's seven geographic regions

Energy resources can be classified as renewable and non-renewable. Worldwide interest in renewable energy investment has been growing due to the impacts on human health and environmental problems resulted in consumption of fossil fuels which are being depleted. Nowadays, it has become a necessity to provide energy from alternative resources. Solar energy is the one of the alternative energy resources. All developing and developed countries provide incentives mechanisms ans supporting strategies to benefit from potential of renewable energy resources. Incentives mechanisim, regulations and policies enable to increase renewable energy investments and shape the solar sector trends. As a developing country Turkey is conducting energy policy to benefit from natural resources to produce electricity and decrease external dependency of energy. Main objectives of conducted energy policies are to take advantage of renewable energy resources at maximum level and decrease environmental impacts of fossil fuels. The aim of this paper is to analyse domestic electricity production by grid connected roof-top photovoltaic systems regarding to economic aspects. Photovoltaic systems implementations, incentives mechanisms and support strategies in four representative European countries including Germany, Spain, France and Italy were evaluated. Thus, effects of different incentives mechanisms on solar sector were reviewed and Turkey's situation in solar sector was revealed. Policies and incentives in four representative countries were compared with Turkish energy policies and conducted incentives. It was analysed whether or not conducted incentives in Turkey was sufficient and under what conditions roof-top photovoltaic systems investments were feasible. Within the study, environmental improvements resulted in photovoltaic systems are also evaluated. The pilot 14 provinces having the highest and lowest solar radiation in Turkey's seven geographic regions were selected according to solar energy potential atlas (GEPA). Roof-top photovoltaic systems with capacity of 3 kW, 4kW and 5kW were simulated by using HOMER software. As an autonomous load the average daily consumption of 11.45 kWh was determined for a four-person household by HOMER. The use of storage battery was not considered since the photovoltaic systems were designed as an on-grid system. HOMER enabled to provide the radiation data of each selected province from Climatological Solar Radiation Data Sets of National Renewable Energy Laboratory (NREL) or NASA Surface Meteorology and Solar Energy Data Sets through internet connection. Since Turkey is located in northern hemisphere panels were considered to be fixed on the south side of the roof. The optimal angle of the south-facing panels were obtained by multiplying the latitude with 0.9. The lifetime of panels and inverters were assumed 20 years. In Turkey, the maximum fit in tariff for generared electricity from solar resources is 20 $ cent/kWhour if the PV module and PV cell are produced in Turkey whereas 14.75 $ cent/kWhour is the electricity consumption price. In the model, feed-in tariff was identified as 15.2 $ cent/kWhour in the model, because it was assumed the PV module and PV cell would be imported. Feasibility of the investments was evaluated regarding to initial cost and feed-in tariff for all pilot provinces. Systems having pay back period of 7 years and below was considered as favourable investments. In order to decrease pay back period, 10 different scenarios including increasing feed-in tariff (25%, 50%, 75% and 100%), decreasing initial cost (25% and 50%) and both of them were evaluated. The differences of solar radiation were not effective on the payback period of the PV investment in the selected provinces in Turkey's seven geographic regions except the Aegean and Eastern Anatolia region. Results of optimization scenarios were similar among provinces with low and high solar radiation value in the same geographic region (except the Aegean and Eastern Anatolia region). The PV investments in Marmara and Black Sea region had the highest payback periods. In order to reduce the payback period to 7 years, initial investment cost were decreased 50% in the optimization scenario in both geographic regions. In the Mediterranean, Central Anatolia and Southeastern Anatolia Region The payback period below 7 years were obtained in the optimization scenario of not only 100% increasement of current feed-in tariff but also 100% increasement of current feed-in tariff and 25% reduction of current initial investment cost. In the Aegean region, the payback period of PV investment could be decreased under 7 years through 100% increasement of current feed-in tariff. In the optimization scenario of decreasing initial investment cost and increasind the feed-in tariff, payback period of PV investment has varied among the pilot provinces in this regions. 25% increasement of current feed-in tariff and 25% reduction of current initial investment cost has enabled to decrease payback period below 7 years in the province with high solar radiation whereas 50% increasement of current feed-in tariff and 25% reduction of current initial investment cost has enabled to decrease payback period below 7 years in the province with low solar radiation in the Aegean region. In the Aegean region, the payback period of PV investment could be decreased under 7 years through 75% increasement of current feed-in tariff. 25% increasement of current feed-in tariff and 25% reduction of current initial investment cost has enabled to decrease payback period below 7 years in the province with high solar radiation whereas 50% increasement of current feed-in tariff and 25% reduction of current initial investment cost has enabled to decrease payback period below 7 years in the province with low solar radiation in the Eastern Anatolia region Regarding to environmental issues photovoltaic systems with capacity of 5kW should be preferred which enable to decrease from 2,7 to 3,5 tonnes of CO2 emissions per detached house although their initial cost was higher than PV system with capacity of 3kW. As a result of this study, roof-top photovoltaic systems in Turkey was economically not feasiable due to pay back period of 12,4 years and above. It was considered providing incentives mechanisms other than feed-in tariff and support programm especiallyregarding to roof-top PV systems could be a first step to decrease pay back periods in Turkey. The pay back period of investments in each pilot province at seven geographic regions has varied that was resulted in difference solar radiation. Dissemination of PV system in Turkey could be accelerated to apply higher feed-in tariff for provinces having lower solar radiation.