Energy 202 (2020) 117771

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Energy
journal homepage: www.elsevier.com/locate/energy

The environmental and economic analysis of grid-connected

photovoltaic power systems with silicon solar panels, in accord with
the new energy policy in Iran
Mostafa Farangi a, *, Ebrahim Asl Soleimani a, **, Mostafa Zahedifar b, Omid Amiri c,
Jafar Poursafar a
a
School of Electrical and Computer Engineering, College of Engineering, University of Tehran, Tehran, Iran
b
Department of Physics, University of Kashan, Kashan, 87317, Iran
c
Department of Chemistry, College of Science, University of Raparin, Rania, Kurdistan Region, Iraq

a r t i c l e i n f o a b s t r a c t

Article history: In recent years, authorities in Iran have introduced supporting policies for renewable energy resources
Received 7 October 2019 but there is no comprehensive and updated survey from this perspective. This work aims to give a
Received in revised form comprehensive survey on the country’s background from energy outlook and its prominent policies for
5 April 2020
renewable energy resources. Due to the high CO2 emissions alongside with the high solar energy har-
Accepted 1 May 2020
Available online 3 May 2020
vesting potential in Iran, We have presented a clear simulation on 20 kW and 1 MW grid-connected
photovoltaic (PV) power plants using RETScreen software to determine the environmental and eco-
nomic aspects based on the net greenhouse gases (GHG) emissions reduction, the annual electricity
Keywords:
Energy policy
exported to the grid, the cumulative cash flows, and the payback period for the initial investment. Ac-
Photovoltaic power plant cording to this simulation, the annual GHG emissions reduction and the annual electricity exported to
Environmental analysis the grid for 20 kW and 1 MW PV power plants are 22.06 tCO2, 1103 tCO2, 39 MWh, and 1953 MWh,
Economic analysis respectively. From the economic outlook, based on the new feed-in tariff for power plants and the
Simulation supposed initial costs, the payback period for the initial investments are between 3 and 4, and 5 years for
RETScreen 20 kW and 1 MW PV power plants, respectively.
© 2020 Published by Elsevier Ltd.

1. Introduction reverse climate change; and how to test our obligation to next
generations who must struggle with an inferior climate we are
Worldwide primary energy demand increased at a rate of 2.9% changing today. In recent years, public awareness, the number of
in 2018, nearly double its 10-year average of 1.5% from 2007 to 2017, communities, national and international meetings about global
which is the highest rate since 2010 [1]. Due to this increasing warming have raised around the world. As prominent examples of
demand for energy and the burning of more fossil fuels, global international meetings, we can mention the Paris Agreement [2]
warming has become one of the greatest consequential dilemmas and the Kyoto Protocol [3] as the two most important conventions
facing human beings with considerable social, environmental, and by the United Nations on climate change.
economic outcomes. There are three outstanding ethical dilemmas, At the same time, Worldwide carbon emissions from energy
making difficult the climate change discussions: how to settle the consumption increased by 2.0% in 2018, again the highest rate for
rights and obligation of the developed and developing countries; seven years, with emissions rising by around 0.6 gigatonnes. To a
how to estimate Geo-engineering schemes planned to slow or significant extent, the increase in carbon emissions is clearly a
direct outcome of the growth in energy consumption [1]. Due to the
important role of coal in carbon dioxide (CO2) emissions, in 2016,
more countries obligated to phasing out or moving away from the
* Corresponding author. coal consumption for electricity production (e.g., Canada, France,
** Corresponding author.
etc.) [5,6] or do not more funding coal utilization (e.g., Brazil’s
E-mail addresses: m.farangi@ut.ac.ir, mostafa.farangi@gmail.com (M. Farangi),
soleimni@ut.ac.ir (E. Asl Soleimani), zhdfr@kashanu.ac.ir (M. Zahedifar), o. development bank) [7]. Opposing this trend, but several countries
amiri1@gmail.com (O. Amiri), j.poursafar@ut.ac.ir (J. Poursafar). declared programs to increase coal production and utilization [4].

https://doi.org/10.1016/j.energy.2020.117771
0360-5442/© 2020 Published by Elsevier Ltd.
2 M. Farangi et al. / Energy 202 (2020) 117771

However, in 2018 there was a significant move back to coal with away from FIT policies to auction and tender policies to support
both production (4.3%) and consumption (1.4%) [1]. large-scale renewable energy project deployment. In spite of the
In a large number of countries, the emission quotas referring to fact that support for large-scale renewable energy projects is
each power company are limited. With the emission trading changing to a different mechanism in a growing number of coun-
pattern, they can determine the most preferred solution after tries, but FIT policies continue to be valid in many countries for the
achieving the Pareto solution set regarding different emission deployment of small-scale renewable energy installations. Policy
quotas. This technique is economically useful for countries with this designers continue to change FIT rates as the technologies become
ability [8]. The emission trading approach can be employed as a more cost-competitive in each country.
useful pattern by the power companies to maximize their profit-
ability [9]. ❖ Auctions and tenders are the most rapidly extending scheme of
Comparatively low worldwide prices for coal, natural gas, and supporting mechanisms for the deployment of renewable en-
oil, keep challenging renewable energy markets, particularly in the ergy projects and are becoming the preferred policy for sup-
heating and transport sectors [10,11]. Subsidies for fossil fuels, porting large-scale projects. Generally, they are on the basis of
which stayed remarkably greater than renewable energy subsidies, the cost of electricity generation; although in auctions, the price
also continued to influence renewable energy development. In is the only factor to be considered, tenders may contain extra
2017 over 50 countries had obligated to phasing out subsidies for criteria.
fossil fuels due to international commitments [12]. Also, subsidy ❖ Net metering is a metering and billing agreement designed to
revises were instituted in 2016 in several countries such as Brazil, compensate small-scale system owners for any electricity pro-
Egypt, India, Iran, Nigeria, Saudi Arabia, Sierra Leone, Thailand, duction that is exported to the grid. Net metering allows utility
Tunisia, Ukraine, Venezuela [13]. customers with on-site distributed energy generation to offset
In the energy sector, the world needs novel trends that are the electricity they extract from the utility grid during the billing
secure, sustainable, and favorable to all, and one of the most cycle (e.g., one month) and they pay for the net electricity
beneficial procedures is the utilization of sustainable energy re- consumed from the grid. Net metering customers directly utilize
sources instead of fossil fuels. The progression and consumption of the electricity produced on-site by their generation systems. If
sustainable energy resources are a fundamental alternative to the amount of generation exceeds the utilized electricity, the
climate change and global energy demand. Utilization of sustain- excess electricity is exported to the utility grid. If a customer
able, reliable, and inexpensive energy will determine the most utilizes more electricity than the distributed energy generation
standard aspects of life, in the future. system produces, he or she imports electricity from the utility
As of 2019, many countries directly provided renewable energy grid and pays the full retail rate for that amount of electricity,
development and deployment with a broad range of policies. These exactly similar to a traditional utility customer.
policies prepare direct and indirect support, in an effort to ❖ Renewable Portfolio Standard (RPS) policy is a regulatory
economy-wide economic progression, environmental conserva- mandate to raise energy generation from renewable resources
tion, and national security. Technology developments, descending and it’s also called a renewable electricity standard. The RPS
costs, and growing utilization of renewable energy resources are procedure usually places an obligation on power supply com-
the results of these policies. In each country, authorities promote panies to generate a clearly described fraction of their power
policies to merge renewable generation into their conventional production from renewable energy resources.
national energy systems. ❖ Besides these main policies, some countries provided public
Due to the power sector is keeping to gain the most attention in funds by grants, loans or tax incentives to guide investment in
energy subject, policymakers have introduced various support renewable energy development. However, most of these in-
procedures and reformed existing policies to improve this sector by centives have been decreased or canceled in recent years in
the utilization of renewable energy resources. These policies can be reaction to tightening fiscal budgets and/or reducing technology
listed as follows: costs.

❖ Feed-in tariff (FIT) policy is an energy-supply policy concen- Although in recent years, policymakers in Iran have introduced
trated on supporting the progress of renewable energy plans by different supporting policies for renewable energy resources but
proposing long period purchase arrangements for the sale of there is no collective and updated survey from this point of view.
renewable energy electricity. These arrangements propose This study examines the country’s background from energy outlook
purchasing every kilowatt-hour electricity for 10e25 years. The and some of its important policies for energy subject and in-
proposed payment levels for each kilowatt-hour can be distin- troduces current supporting policy for various renewable and clean
guished by various factors such as project size, resource quality, energy resources. Due to the serious CO2 emissions and air pollu-
technology type, and project location to properly cover main tion in large cities of the country alongside with the high solar
project costs. Policymakers can also arrange the payment levels energy harvesting potential and growing trend of utilization of PV
to decrease for installations in the following years, which will technology in Iran, we investigate environmental and economic
both follow and encourage changes in technology. The two most aspects of two different scales of PV systems, 20 kW as a candidate
ordinary FIT policies are the fixed FIT and the feed-in premium. for small-scale (for residential and commercial users) and 1 MW as
In the fixed FIT, which is the most widely used FIT design, a candidate for large-scale (utility-scale) grid-connected PV power
payment quantity stays independent of the market price for systems in Tehran, Iran, using RETScreen software based on the
electricity, proposing a guaranteed payment for a clearly new feed-in tariff policy.
described period. In the feed-in premium, which is being
increasingly used, the payment quantity is based on a premium 2. Country background and energy policy
proposed above the market price for electricity and this pre-
mium can either vary, dependent upon a sliding scale, or it can 2.1. Iran
be constant.
Iran, an Asian country, is the 18th largest and 17th most popu-
Several countries, especially in Europe and Asia, have shifted lated country in the world. In this territory, population and
 M. Farangi et al. / Energy 202 (2020) 117771 3

technology growth has driven to the necessity for more energy Efficiency Organization in 1994) and SUNA (Renewable Energy
production; while electricity production is mainly controlled by its Organization of Iran in 1995). These organizations have con-
fossil fuel resources. This country has the second-largest proven ducted several projects on the wind, solar, and geothermal en-
natural gas reserves (33.5 trillion cubic meters) and the fourth- ergy resources in Iran.
largest proven crude oil reserves (158.4 thousand million barrels) ✓ National Iranian Oil Company established IFCO (Iranian Fuel
in the world, around 18% and 9.3% of the world’s total reserves, Conservation Company) in 2000 with the aim to regulate fuel
respectively [14,15]. consumption in various sectors. IFCO has audited several
It has an outstanding regional occasion because it is surrounded manufacturing industries and recommended different proced-
by several countries that are more opportune for international ures for energy conservation in those units. Substituting
economic progression due to their vast and various energy re- pollutant and inefficient old taxis with new autos in cities and
sources, tourism market, passenger and freight transportation. This using compressed natural gas (CNG) as a replacement for gas-
occasion could be managed more appropriately in the energy field oline are samples of the plans by IFCO in recent years.
with a suitable energy business strategy to accomplish electrical, ✓ Iran has tried to improve the consumption of nuclear energy by
gas pipeline, and crude oil pipeline loops between neighboring finishing the Bushehr nuclear plant (which started in the 1970s
countries and Iran [16]. and become operational in 2013) and investing in other new
plants. In 2018, its energy consumption based on nuclear energy
2.2. Energy policy was 1.6 Mtoe [1].
✓ Although high-impact low-probability (HILP) events such as
However, Iran’s immense fossil fuel energy resources alongside earthquakes, hurricanes, and consequent flooding have a
subsidization, have resulted in the growing consumption of energy prominent influence on power generation companies [17] and
without seriously being worried about energy efficiency and the the number of these natural disasters has increased in recent
negative influences on the environment. During recent years, it has years in Iran, but there is not a comprehensive and clear policy
embarked on several policies for the production and consumption for these situations. Generally, the government decides based on
of energy. Four remarkable policies that have affected energy de- the event impact on local people life and, for example, provide
mand, can be mentioned as: them with free fuel and power for a certain period of time. As
another example of the emergency situation, during the COVID-
I. The first and the most prominent energy policy in Iran is the 19 crisis in the world, the authorities in Iran have postponed the
large energy consumption subsidization, particularly in payments due for water and power bills in the country.
households and transport sectors. There are several distinc-
tive approximations for energy subsidies in Iran (between 0.5
and 12% of GDP); However, it is accepted that Iran’s energy 2.3. Renewable energy policy
subsidies are one of the top-ranking energy subsidies in the
world. Similar to other countries in the world, there has been a growing
II. The second policy is assigning of oil production capacity in trend toward the utilization of sustainable energies in Iran, too.
accord with the OPEC endorsements. Meanwhile, faced with Besides enormous fossil fuel reserves, Iran enjoys a perfect poten-
capital restrictions, Iran identified the important role of in- tial of using renewable energies (energy resources that are natu-
ternational investment in the oil sector to develop new fields rally inexhaustible and replenished) such as solar, wind,
and improve the recovery factor in the existent fields, hence geothermal, biomass, and hydropower. In Iran, electrical customers
presented a “buy-back” contract to international investors. participate in an electricity market and buy electricity generated
This contract permitted international companies to finance from fossil fuels. Due to the current Levelized cost of electricity
in oil and gas fields in Iran and to share profits with the (LCOE) prices, the production of electric power based on renewable
domestic counterparts. energy resources is not economical on its own yet. Therefore, the
III. The third prominent energy policy in Iran has been the progression of the renewable energy division in Iran is leaned upon
noticeable consumption and progression of natural gas fields the government incentive attitude and its encouraging policy on
from the 1990s so far. This policy reinforced, especially when this subject. From the environmental aspects, noticeable troubles in
Iran discovered its share of the South Pars gas field, the Iran are CO2 emissions and air pollution. In 2018, CO2 emissions in
world’s largest gas reservoir, which is located in the Persian Iran were 656.4 million tonnes, increased by 5.5% growth rate per
Gulf. Iran has been using most of its ever-growing gas pro- annum that is above double its 10-year average of 2.6% from 2007
duction to replace relatively cheap and environmentally to 2017 [1]. So recently, the authorities have paid basic investment
friendly natural gas for domestic consumption of crude oil in harnessing renewable energies and laid down the new sup-
products in various sectors. In 2018, its energy consumption porting policies to inspire people to use clean energy resources.
based on natural gas was 193.9 million tonnes of oil equiv- Due to the huge investments in hydropower, a large share of
alent (Mtoe) [1]. renewable power generation in Iran is hydroelectricity, around 2.4
IV. The fourth important energy policy in Iran is providing rural Mtoe in 2018 [1]. Although in recent times, it has been financing on
areas with electricity by new transmission lines. This policy others, such as wind and solar power, too.
has assisted a lot of rural communities to receive clean and Solar energy as a worthwhile renewable energy source has
cheap energy and decrease environmental problems like for attracted a lot of attention nowadays. Living things, including hu-
example deforestation. man beings, depend on solar energy for warmth and food. How-
ever, human beings also harness solar energy in many distinctive
Some other prominent policies in the energy sector in Iran can ways. They use solar energy either indirectly as the form of fossil
be listed as follows: fuels, biomass, wind, hydropower, and … or directly by utilization
solar thermal technology (using solar energy to generate low-cost,
✓ Establishment of two organizations by the Ministry of Energy environmentally friendly thermal energy) and PV technology.
for studying and expanding investment in renewable energy PV devices or solar cells directly convert energy from the sun-
resources. These two organizations are SABA (Iran Energy light into electricity by the PV effect quietly, with no pollution or
4 M. Farangi et al. / Energy 202 (2020) 117771

moving parts. A PV system is working differently than most such as different feed-in tariff and subsidies have been described to
electric-generating systems because it generally doesn’t need a stimulate using of renewable energies and turn them into
technician to be on-site for daily direct management due to its competitive technologies with common electricity production
automated operation, and it just needs insignificant and slight methods based on the burning of fossil fuels. According to the new
oversight, monitoring, and maintenance. These systems are supporting policy of the government, the latest prices for electricity
designed modularly and can be built on different scales. based on the feed-in tariff by offering long-term contracts to
Fortunately, solar energy is broadly achievable in most areas of renewable energy resources are shown in Table 1 [24]. The selected
Iran, specifically in the southern and central regions (Fig. 1). This currency in this study is the Iranian Rial (IRR) which can be con-
country is potentially one of the best regions for solar energy har- verted to US Dollar (USD) easily (1 USD z 42,000 IRR). According to
vesting because located in the global Sunbelt, and experiences Table 1, the government will buy electricity from the producers at
three hundred sunny days per year on over two-thirds of its land two prices: during the first 10 years, the purchasing price is rela-
area, according to SATBA (renewable energy and energy efficiency tively high to investors gain their investment as soon as possible.
organization), the ministry of energy, Iran [19]. The radiation dis- However, during the second 10 years, the price will be decreased to
tribution varies between 2.8 kWh/m2 in the southeast part to 70% of the prime bid for all resources except the wind systems (the
5.4 kWh/m2 in central parts. In a country-wide analysis of irradi- price will be calculated according to their capacity factors), and
ance, it is estimated that on 80% of Iran’s land area, solar irradiance after 20 years the electricity can be sold in energy exchange. So,
is between 1640 and 1970 kWh/m2/year [20]. The calculations investments in different renewable and clean energy resources
show that the applicable solar radiation hours in Iran surpasses (especially PV technology) with different scales, are fostered by the
2800 h per year [21,22]. According to the reports, by covering only new feed-in tariff to decrease consumption of fossil fuels in Iran.
1% of the deserts in the country by solar collectors, the output
energy would be five times greater than its annual gross electricity 3. Simulation
output [15,23].
Besides Iran’s solar energy harvesting potential, several factors Regarding the growing trend in using PV technology around the
such as the price of fossil fuels in electricity generation and the globe, there is a considerable requirement for relatively simple, and
import of expensive PV instruments have limited applying PV user-friendly software packages, for the designing and performance
technology in Iran. As mentioned above, new supporting policies assessment of PV systems by installers particularly during the

Fig. 1. Global horizontal irradiation (GHI) in Iran [18].

 M. Farangi et al. / Energy 202 (2020) 117771 5

Table 1
the new feed-in tariff to support renewable and clean energy resources in Iran.

Energy type Specification IRR/kWh (USD/kWh)

The first decade The second decade

Biomass Landfill 2700 (6.43) 1890 (4.5)

Anaerobic digestion of livestock and agriculture 3500 (8.33) 2450 (5.83)
wastes and sewage sludge
Waste Incineration and gasification 3700 (8.81) 2590 (6.17)
Wind More than 50 MWa 3400 (8.10)  (0.4e1)b
50 MW 4200 (10)  (0.4e1)b
1 MW 5700 (13.57)  (0.4e1)b
Solar More than 30 MWa 3200 (7.62) 2240 (5.33)
30 MW 4000 (9.52) 2800 (6.67)
10 MW 4900 (11.67) 3430 (8.17)
100 kW 7000 (16.67) 4900 (11.67)
20 kW 8000 (19.05) 5600 (13.33)
Small hydropower (10 MW) On the rivers and peripheral equipment for dams 2100 (5) 1470 (3.5)
On the water pipeline transport 1500 (3.57) 1050 (2.5)
Geothermal including drilling and equipment 4900 (11.67) 3430 (8.17)
WHRU Production of electricity from the waste heat recovery unit 2900 (6.90) 2030 (4.83)
Fuel cells e 4948 (11.78) 3463.6 (8.25)
Turboexpander Known as turbo-expander or expansion turbine 1600 (3.81) 1120 (2.67)
a
The highest level capacity for the wind and solar farms will be determined by the policy of the ministry of energy on renewable and clean energy development policy,
which is following up to 2000 MW in a year by the private sector.
b
During the second decade, the contract fee will calculate based on the capacity factor. For wind farm with capacity factors 40% and 20% during the first 10 years, the
prime fee will multiply in 0.4 and 1, respectively. For capacity factors between 20 and 40%, the prime fee will multiply in a number proportionally.

prime design phases of a project. This requirement has led to the latitude, and longitude coordinates are 1191 m, 35.68 and 51.3
progress of many PV software packages such as PVWatts, PVsyst, respectively. Climate data for this site is gathered from the weather
POLYSUN, HOMER, RETScreen, PV JEDI with various capabilities for station and NASA database in RETScreen (Table 2).
analyzing these power systems. Generally, simulation and analysis The capacity factor of the PV module (the ratio of the average
of each PV power system include main divisions such as technology power produced by the power system over a year to its rated power
and performance analysis, energy systems analysis, environmental capacity) is vital for selecting a proper site and solar system, and its
analysis, and economic and financial analysis. quantity is 22.30% for the fixed solar array in Tehran [15].
In this article the simulation has been carried out by applying We used Yingli Silicon Solar PV Modules (Mono-Si-Panda-
RETScreen, a clean energy management program for energy effi- YL250C-30b) 250Wp with a module efficiency of 15.3% for this
ciency, renewable energy and cogeneration project feasibility ex- simulation. The numbers of PV modules for 20 kW and 1 MW PV
amination, and also ongoing energy performance analysis [25]. This power plants are 80 and 4000 modules, respectively. According to
is an extremely user-friendly software and provides decision- the PV market in Iran, the estimated initial and periodic costs (due
makers with primary or even meticulous detailed information to the inverter replacement) for these two systems are shown in
about the project. One of the main advantages of this software is Table 3. Several factors such as site location, type of PV technology,
that it makes the project assessment procedure easier and a great maintenance, and … may affect these estimated prices.
number of projects have been investigated by this software.
The investigated case of the PV installation is the grid-connected 4. Results and discussion
PV system with easy installation, and in locations with trustworthy
grid power, it generally doesn’t need the battery equipment for 4.1. 20 kW PV power plant
backup power. After installation, these systems do not need extra
care and service, do not generate CO2 and air pollution, and they are The first case, 20 kW PV power plant, is a candidate for small-
as quiet as the sun. A schematic diagram of the simulated grid- scale PV power plants. A small-scale PV system is normally
connected PV power system is shown in Fig. 2. mounted on places like residential or commercial roofs, the ground
RETScreen software is provided with NASA’s Satellite-derived in backyards, or facade of the building, etc. Along with the grid,
Meteorological Data (developed by NASA’ Langley Research Cen- these systems can take advantage of the battery equipment for
ter in collaboration with CanmetENERGY) for any location and the backup power during a power outage, or while the sun is not
NASA Prediction of Worldwide Energy Resource (POWER) project. shining. However, this advantage comes with intensified
This data set is a helpful option when there is no access to ground- complexity, price, and maintenance. Hence, in locations with
based data or itemized resource maps for the project location; It is trustworthy grid power, ignoring the battery backup system is the
calculated from data collected for a 20-year period starting in July logical choice.
1983, applying a 1-degree cell (at mid-latitudes (45 ) the cell di- As mentioned before, global warming has become one of the
mensions is around 80  110 km). Solar radiation parameters are greatest consequential dilemmas facing the human being in this
derived using satellite data of the atmosphere and Earth’s surface. century, thereby researching on GHG emissions is necessary for any
The other meteorological values are adapted from Goddard Earth power project. An emissions analysis worksheet is provided in
Observing System (GEOS) meteorological analysis by the NASA’s RETScreen to help studies on the GHG emissions mitigation po-
Global Modeling and Analysis Office (GMAO). The selected site for tential of renewable energy projects.
this simulation is Mehrabad national airport which its elevation, The main GHGs are water vapor, CO2, methane (CH4), nitrous
6 M. Farangi et al. / Energy 202 (2020) 117771

Fig. 2. Schematic diagram of a grid-connected PV power system.

Table 2
The climate data of Mehrabad national airport, Tehran, Iran.

Month Air T ( C) Earth T ( C) Relative humidity Daily solar radiation e horizontal (kWh/m2/d) Atmospheric pressure (kPa) Wind speed (m/s)

Jan. 3.0 1.0 60.1% 2.44 88.5 35

Feb. 5.3 2.5 51.6% 3.33 88.3 50
Mar. 10.3 7.3 46.4% 4.08 87.9 64
Apr. 16.4 15.7 41.6% 5.42 87.5 71
May 22.1 21.9 34.2% 6.42 87.3 72
Jun. 27.5 26.9 27.6% 7.64 86.8 67
Jul. 30.4 29.1 29.8% 7.50 86.5 55
Aug. 29.2 28.1 29.0% 6.92 86.8 49
Sept. 25.3 23.1 31.6% 5.75 87.3 47
Oct. 18.5 16.0 39.2% 4.25 87.9 47
Nov. 11.6 8.7 49.8% 2.92 88.3 39
Dec. 5.6 2.9 61.2% 2.25 88.5 35
Annual 17.2 15.3 41.8% 4.92 87.6 53

Table 3 plant from the net annual GHG emissions reduction outlook. In this
Estimated costs for two PV power plants in Iran. table, important equivalent cases from the environmental
Capacity Initial cost: IRR (USD) Periodic cost: IRR (USD) perspective, such as the number of cars & light trucks that are not
Year Amount

20 kW 1200000000 (28,571) ~12 260000000 (6190)

10 MW 50000000000 (1190476) ~12 10750000000 (255,952) Table 4
Equivalent cases substitute for 20 kW PV power plant based on net annual GHG
emissions reduction in Iran.

oxide (N2O), ozone (O3) and Fluorinated gases. GHGs that are Equivalent cases Value
considered for energy project analysis are CO2, CH4, and N2O which Cars & light trucks not used 4
are expected in the RETScreen emission reduction analysis. Results Liters of gasoline not consumed 9496
from the GHG equivalence tool in the RETScreen are presented in Barrels of crude oil not consumed 51.4
terms of the annual amount of CO2 that would be equivalent to the People reducing energy use by 20% 22.1
Acres of forest absorbing carbon 5.0
total emission reduction, regardless of the actual gases. and it’s Hectares of forest absorbing carbon 2.0
done by converting CH4 and N2O emissions to the equivalent CO2 Tons of waste recycled 7.6
emissions based on their global warming potential. Annual GHG emissions reduction 22.06 tCO2
In Table 4, one can find interesting data about 20 kW PV power Annual electricity exported to the grid 39 MWh
 M. Farangi et al. / Energy 202 (2020) 117771 7

used, liters of gasoline not consumed, barrels of crude oil not Table 5
consumed, people reducing energy use by 20%, acres of forest Equivalent cases substitute for 1 MW PV power plant based on the net annual GHG
emissions reduction in Iran.
absorbing carbon, hectares of forest absorbing carbon, tons of waste
recycled are mentioned. According to this simulation, the annual Equivalent cases Value
GHG emissions reduction and the annual electricity exported to the Cars & light trucks not used 202
grid for 20 kW PV power plant are 22.06 tCO2 and 39 MWh, Liters of gasoline not consumed 473,928
respectively. Barrels of crude oil not consumed 2565
People reducing energy use by 20% 1103
A financial analysis worksheet in RETScreen is provided to aid
Acres of forest absorbing carbon 251
the feasibility investigation of renewable energy projects. By Hectares of forest absorbing carbon 101
considering a new supporting policy of the government for Tons of waste recycled 380
renewable energy resources, a financial analysis was carried out Annual GHG emissions reduction 1103 tCO2
Annual electricity exported to the grid 1953 MWh
based on the new feed-in tariff for PV electricity in Iran (Table 1)
and estimated initial and periodic costs for 20 kW PV power plant
(Table 3). The cumulative cash flows from the simulation are
plotted versus time in Fig. 3.
According to this figure, the estimated initial cost for 20 kW PV
power plant is 1.2 bIRR based on the PV market in Iran. After
starting operation, the gained annual interest income is above 300
MIRR so the payback period for the initial investment is between 3
and 4 years. The change in the linear trend of this plot is related to
the estimated periodic costs (260 MIRR) for replacing invertors and
other necessary services after 12 years. Following this payment, the
same annual interest income can be gained until 20 years. The
average annual interest rate for this investment is about 8.75% over
20 years, base on the new feed-in tariff for this scale of the PV
power plant.

4.2. 1 MW PV power plant

The second case, 1 MW PV power plant, is a candidate for large-

scale PV power plants. Large-scale (utility-scale) PV power plants,
Fig. 4. The cumulative cash flows versus year for 1 MW PV power plant.
also known as solar parks, farms, or ranches (particularly when
they are located in agricultural areas) are power stations that
provide a considerable amount of electrical energy to great
numbers of consumers. Large-scale PV power plants are ground-
mounted, usually with fixed tilted solar panels instead of utilizing
expensive tracking systems. (Table 1) for 1 MW PV power plant, too. The cumulative cash flows
A similar examination was carried out on 1 MW, same as from the simulation are plotted versus time in Fig. 4. According to
20 kW PV power plant. First, the GHG emissions mitigation was this figure, the estimated initial cost for 1 MW PV power plant is 50
studied and related data are presented in Table 5. According to this bIRR and after starting operation, the obtained annual interest in-
simulation, the net annual GHG emissions reduction and the come is above 1 bIRR so the payback period for the initial invest-
annual electricity exported to the grid for 1 MW PV power plant are ment is about 5 years. The change in the linear trend of this plot is
1103 tCO2 and 1953 MWh, respectively. related to the estimated periodic costs (10.75 bIRR) for replacing
A financial analysis was carried based on the new feed-in tariff invertors and other necessary services after 12 years. Following this
payment, the same annual interest income can be gained until 20
years. The average annual interest rate for this investment is about
3% over 20 years, base on the new feed-in tariff for this scale of the
PV power plant.
We have simulated two different scales of the PV power plant
and investigated them from the environmental and economic as-
pects based on CO2 emissions, and the cumulative cash flows after
the new feed-in tariff, respectively.
From the environmental (CO2 emissions) and electricity gener-
ation perspective, a comparison between these two scales of PV
power plant shows us that CO2 emissions and the annual electricity
exported to the grid, have a linear relationship with the scale of the
power plant. We can reduce the quantity of CO2 emissions by using
PV technology as multiple small-scale PV power plants (by resi-
dential and commercial users), or a large-scale PV power plant (by
the governments) in the same impact. From the economic outlook,
there isn’t a linear relation in cumulative cash flows rate and the
average annual interest rate with the scale of the PV power plant.
With a comparison between these two cases, as candidates for
small-scale and large-scale PV power plants, we can realize that
Fig. 3. The cumulative cash flows versus year for 20 kW PV power plant.
8 M. Farangi et al. / Energy 202 (2020) 117771

this difference comes from various amounts of the feed-in tariff for CRediT authorship contribution statement
different scales of PV power plants in Iran. According to the sup-
posed initial costs, the payback period for the initial investments Mostafa Farangi: Conceptualization, Formal analysis, Investi-
are between 3 and 4, and 5 years for 20 kW and 1 MW PV power gation, Methodology, Software, Writing - original draft, Writing -
plants, respectively. review & editing. Ebrahim Asl Soleimani: Conceptualization.
Hence, in accord with the high initial costs for PV power plants, Mostafa Zahedifar: Formal analysis, Writing - original draft,
the ministry of energy in Iran has formulated an incentive and Writing - original draft. Omid Amiri: Formal analysis, Writing -
supporting policy to persuade people, spatially residential or original draft. Jafar Poursafar: Formal analysis, Writing - original
commercial users, or private sector to invest in small-scale PV po- draft.
wer plants. Therefore, residential and commercial customers will
have considerable long-term benefits, from taking part in an elec- Acknowledgments
tricity market and selling their PV systems output. While those PV
systems generally do not need a technician to be on-site for daily Reference to any special commercial product, trademark,
direct management due to its automated operation, and they just manufacturer, and so on, does not necessarily infer or insist on its
need insignificant and slight oversight, monitoring, and mainte- confirmation, or approval by the writers.
nance. On the other hand, the government itself has taken the re-
sponsibility to set up large-scale PV power plants around the
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