Feasibility Study of Developing Photovoltaic Power Projects in Italy: An Integrated Approach

The balance between the demand for electricity by consumers and businesses, and environmental protection, is one of the key challenges of our society. The PV industry in 2010 compared to 2009 registered a growth of 130%, consolidating the previous achievements. The reduction in costs of system and incentive policies have favored the development of solar energy. At the same time, the results achieved have led to a resulting reduction of Feed-in Tariff (FiT) by the central governments, generating concern from both the owners, investors and operators. This article belongs to a wider research and aims to analyze the determinants of investment risk in the PV industry through a sensitivity analysis, scenario analysis and risk analysis. To do this, alternative business plans have been developed that compared to the static situation, allow to quantify how Net Present Value varies according to different parameters. Strong attention is placed on the project’s critical variables, the opportunity cost of capital, the time duration of the project, the plant size and geographical location of the system, analyzing the specific case of Italy.