2018 International Conference on Computer, Control, Electrical, and Electronics Engineering (ICCCEEE)

An Economic Evaluation of Grid Connected

Photovoltaic System for a Residential House
in Khartoum
Elaff ALfadil Ismail Dr. Samah Mohammed Hashim
School of Electrical Engineering Department of Electrical and Electronic Engineering
Sudan university of science and technology Energy Research Center
Khartoum, Sudan University of Khartoum
elaffismail@gmail.com Khartoum, Sudan
Samah_hashim@hotmail.com

Abstract—The climatic conditions of Sudan are ideal for produces less energy than needed energy is taken from the grid
solar energy technology. In areas where grid is available grid [3].
connected systems are more advantageous. In this study
economic evaluation of grid connected photovoltaic system for a II. SCOPE AND OBJECTIVE:
residential house located in Khartoum has been conducted to The objective of this study is to provide information on
provide information on economic viability of PV-grid connected
economic viability of photovoltaic-grid connected system
system to assist taking the decision about system
implementation. The proposed system was simulated using
located in Khartoum to assist the decision on the PV system
PVSYST software to obtain the energy output, and using implementation. It will provide useful information to policy
Microsoft excel sheet the economic evaluation is conducted for makers, organizations and individuals in the feasibility of
two scenarios one with no incentive policies from the small PV system connected to grid in Sudan.
government and in this case the system will take 18 years before This work will also show that with appropriate
it starts to produce a profit with 4% internal rate of return. The government incentives the photovoltaic energy can be boosted
other case is under the effect of the feed in tariff rate and the and developed in Sudan. The levelized cost of energy
payback period is founded to be 9 years with 10% internal rate
produced by this system will be estimated and compared with
of return. The system produces 20707kWh yearly and the cost
of the kWh is found to be 0.051$. The study is based on a pilot
the standard residential electricity tariff in Sudan.
project of 5 kw PV grid connected system in the energy research
center at the faculty of engineering, university of Khartoum.
III. DATA COLLECTION
Keywords—solar photovoltaic, grid connected, economics
A. The Proposed PV system:
levelized cost of electricity, payback period,
The proposed system is a grid-connected PV system
I. INTRODUCTION consists of solar array, PV inverter, and PV meter for
residential house located in Khartoum, Sudan.
The energy is the most valuable resource for any country,
its availability and cost play a big role in the economic growth B. The Location:
of the country. Globally the world is moving fast towered Sudan lies within the tropics, it Enjoys a tropical climate;
using renewable energy because of many reasons, starting solar energy is available throughout the year and the average
from the fact that fusel fuel is not available everywhere and solar insulation indicate high potential for solar energy use.
that it will all end by 2050, passing throw the climate change The selected location is in Khartoum, 15.60 latitude, 32.550
and the sustainable development .It is technically feasible for longitude. Based on the data obtained from the Surface
renewable energy technologies to replace the present fossil meteorology and solar energy website (NASA), the monthly
fuel electricity infrastructure; however, economic barriers averaged daily global solar radiation data for the location is
remain the primary impediment to renewable-powered society shown in Fig.1
[1]. Due to the nature of solar photovoltaic panels must be
integrated with a storage facility, in areas without grid, battery
bank can be used as the storage but it will add cost which will
increase the cost of the produced electricity, but in places with
grid system the grid can be used as storage. about 99% of all
European and 90% of all U.S. solar power systems are
connected to the electrical grid [2]. In this arrangement, when
the photovoltaic system produce more energy than needed,
the surplus energy is fed into the grid and when the system

978-1-5386-4123-1/18/$31.00 ©2018 IEEE

 E. Initial Investment Cost:
A market survey on the price of PV system components in
Khartoum was carried out. and the average prices were used.
The cost for installing of 12 kWp grid-connected PV in
Khartoum is shown in Table 3.
TABLE 3. SYSTEM COST IN USD
PV modules 8400
Inverter 5000
Fig. 1. Radiation data,Khartoum [4]
Meter 1000
Cabling, installation cost 1600
Several types and sizes of houses are in Khartoum as in Total 16000
Table 1. the houses with 200kWh/month consumption are
dominating the houses in term of installed electricity capacity,
but for the study a house of 900 kWh/month is taken although The total initial investment includes the equipment price
the houses in this segment represent 3.8% of the total and the installation cost is 16000 USD (currency conversions are
consumption the saving potential for consumers with higher done using the official rate of 1USD=15 SDG). The solar array
electricity demands are high since the tariff increases with requires minimal maintenance and the main concern is the
consumption, also this segment is more economically capable dust accumulation on the surface of the panel. Generally the
of installing PV systems. operation and maintenance cost of solar PV system of <1MW
is between 1% to 5% of total investment cost [6]. 25 years is
TABLE 1. RESIDENTIAL ELECTRICITY CONSUMPTION IN KHARTOUM
taken as photovoltaic panel life time and 15 years for the
[5].
inverter.
Consumption
Segments(kWh/month) Consumption rate
kWh IV. ECONOMIC ANALYSIS
Less than 200 256107785.8 62%
There are two main ways we can assess the economic
200-400 96096412.01 23.3% viability of a solar power system; One is by calculating the
cost of solar electrical energy and comparing it with the cost
400-600 32121033.75 7.8%
of grid energy, this is known as the levelised cost analysis.
600-800 12825339.16 3.1% Another method is by treating it like any other investment and
estimating its financial payback [7].
More than 800 15816848.1 3.8%

100%
A. Levelised cost of energy:
total 412967418.8
The unit cost of electricity produced by a grid-connected
photovoltaic system (cost/kWh). The LCOE is a measure of the
marginal cost of electricity over a period of time and it is commonly
C. The System Specification: used to compare the electricity generation costs from various sources
[8].
The size of the PV system is estimated to be 12 Kw,
generate 20707 kWh per year which is enough to supply the Assuming that the PV system generates the same amount
house with the its electricity need, and excess electricity could of energy each year during its life time, the investment cost
be sold back to the electric utility to offset power needed at can be annualized using capital recovery factor given as:
night.

𝐶𝐴 = 𝐶𝐼 ∗ (𝑃⁄𝐴) (1)
𝑖,𝑛
D. Electricity rate structure:
The electricity tariff for residential sector in Sudan is CA is the annual cost
divided into five segments and regulated by the Sudanese CI is the investment cost
electricity distribution company. there is no policy yet for feed
in tariff for solar systems i is the annual interest rate
TABLE 2. TARIFF STRUCTURE [5] n is the project economic life (years)
𝑖∗(1+𝑖)𝑛
segment Tariff SDG segment Tariff SDG (𝑃⁄𝐴)𝑖,𝑛 = (2)
(1+𝑖)𝑛 −1
0-200 0.15
200-400 0.26 The annual LCOE can be estimated from:
400-600 0.32 𝐶𝐴 +𝐶(𝑂&𝑀)𝐴
𝐿𝐶𝑂𝐸 = (3)
600-800 0.52 𝐸𝐴
More than 800 kWh 0.85 EA is the annual energy produced by the PV system
C(O&M) A is the annual operation and maintenance cost
 Due to presence of inflation rate (f), the nominal interest V. RESULTS
rate can be corrected to give real interest rate (r):
A. Levelised cost of energy:
1+𝑖
1+𝑟 = (4) System Energy output (using the PVSYST software) shown
1+𝑓
in Fig.2
B. The payback period
Investment in a PV project involves cash flow, the initial
cost and maintenance costs are represented as negative cash
flow, while the value of the electricity produced and other
income/saving values are represented as positive cash flow
value [9].
Financial analysis is conducted for three scenarios:
i. The grid electricity price is the average international
price.
ii. The price of electricity received from the grid and the
price of electricity from the PV system sent to the Fig. 2 total monthly energy production by the PVsystem.
grid are the same (without incentive)
iii. Feed-in tariff condition. The monthly total energy generated vary between 70 kWh/day
in May and 40 kWh/day in December. The total annual energy
Feed-in-tariff: output delivered by this system is 20707 kWh/year with an
Feed in tariff (FIT) is a policy mechanism designed to average energy output of 56.7 kWh/day.
support the growth of development of renewable energy The interest rate is taken as 5.0% while the inflation rate of
systems [10]. 2.1% is used. the system is assumed to produces the same
amount of energy each year during its economic life
The feed-in tariff consists of two parts; the cost of
generation (levelised cost of electricity) and a premium cost. (degradation is neglected).
The premium cost of energy can be estimated using the Using the capital recovery, the annualized investment cost is
following steps: given as:

1. Calculating of the levelised cost of electricity using 𝑖∗(1+𝑖) 𝑛

Eq. (1,2,3). (𝑃⁄𝐴) = (1+𝑖)𝑛 = 0.056

𝑖,𝑛 −1

2. Estimation of the cost of electricity that will make the

net present value of the cash flow of the system 𝐶𝐴 = 𝐶𝐼 ∗ (𝑃⁄𝐴) = 1600 ∗ 0.056 = 902.5
𝑖,𝑛
greater than zero over its economic life time,
(LCOEFIT). This value should make the internal rate The annual energy produced by the system EA = 20707kWh
of return (IRR) of investment on the system lie
between 5% and 10%. However, this value can be 𝐶𝐴 +𝐶(𝑂&𝑀)𝐴 902.5+160
made to greater than 10% to make the investment on 𝐿𝐶𝑂𝐸 = = = 0.051 $/𝑘𝑊ℎ
𝐸𝐴 20707
renewable energy system more attractive [8]. For this
study, its assumed that the IRR of 10% is a target The estimated LCOE is 0.051 $/kWh. The average
value. national grid tariff for 900kWh/month house is 0.055$/kWh.
3. The ‘premium’ is determined from: Fig.3 below shows the average cost of utility energy
Premium = LCOEFIT – LCOEA (5) against the leve;ised cost of energy of the photovoltaic system
over its life time assuming that the utility inflation rate to be
1% (there is no fixed percentage for utility inflation rate or
unique pattern)
The premium determined using Eq.(5) represents ‘bonus’ cost
of electricity over the levelised cost of electricity. If this value
is less than zero, there will be no need for feed-in-tariff for
the investment to breakeven and be profitable. However, if it
is greater than zero, there will be a need for feed the tariff in
this investment to be economically viable and attractive [8].

Fig. 3 the cost of utility energy versus the photovoltaic system energy
cost (LCOE)
 The investment in this project will provide a fixed cost of 80,000
energy over its 25-year lifetime which was paid for in cash 70,000
and it will protect from utility rate inflation. 60,000
50,000
B. Payback period analysis Results: 40,000
National perspective: 30,000
The electricity price is the international price 0.16$/kWh 20,000
and the price of electricity from the grid and the price of 10,000
photovoltaic system electricity sent to the grid are the same 0
-10,000 0 2 4 6 8 10 12 14 16 18 20 22 24
(without incentive. the Cash flow of this case is shown in table
-20,000
4 and the cumulative cash flow is shown in Fig.4. -30,000
TABLE 4. CASH FLOW
Fig. 4. Cumulative cash flow:
Inverter utility
The bay back period is 4 years.
replacement bill
End Initial cost USD savings
NPV =43000
Maintenance
of investment with
cost USD Actual perspective:
year USD inflation
applied First scenarios:
USD The price of electricity received from the grid and the price
0 16000 - - - of the photovoltaic system electricity sent to the grid are the
same (without incentive). the Cash flow of this case is shown
1 160 - - 3346.08
in table 5 and the cumulative cash flow is shown in Fig.5.
2 160 - - 3379.05
3 160 - - 3413.34 TABLE 5. CASH FLOW WITHOUT INCENTIVE
4 160 - - 3447.47 Inverter utility bill
5 160 - - 3481.95 End Initial replacement savings with
Maintenance
of investment cost USD inflation
6 160 - - 3516.77 cost USD
year USD applied USD
7 160 - - 3551.9
8 160 - - 3587.46 0 16000 - - -
9 160 - - 3623.34 1 160 - - 1202.460045
10 160 - - 3659.57 2 160 - - 1214.485
11 160 - - 3696.16 - 1226.629492
3 160 -
12 160 - - 3733.16 4 160 - - 1238.895787
13 160 - - 3770.46 5 160 - - 1251.284745
14 160 - - 3808.16 - 1263.797592
6 160 -
15 160 - 5000 3846.24 7 160 - - 1276.436
16 160 - - 3884.71 8 160 - - 1289.2
17 160 - - 3923.55 9 160 - - 1302.092
18 160 - - 3962.79 10 160 - - 1315.113
19 160 - - 4002.42 11 160 - - 1328.264
20 160 - - 4042.44 12 160 - - 1341.547
21 160 - - 4082.87 13 160 - - 1354.962
22 160 - - 4123.69 14 160 - - 1368.512
23 160 - - 4164.93 5000 1382.197
15 160 -
24 160 - - 4206.58 16 160 - - 1396.019
25 160 - - 4248.65 17 160 - - 1409.979
18 160 - - 1424.079
19 160 - - 1438.32
20 160 - - 1452.703
21 160 - - 1467.23
22 160 - - 1481.902
23 160 - - 1496.721
24 160 - - 1511.688
25 160 - - 1526.0
 15,000
Feed-in-tariff of US$ 0.13/kWh that gave 10% internal rate
of return is used in this case, the premium cost required above
10,000
the cost of generation is estimated at US$ 0.075/kWh.
5,000
0
40,000
-5,000 0 2 4 6 8 10 12 14 16 18 20 22 24

-10,000
30,000
-15,000 20,000
-20,000 10,000
Fig. 5 Cumulative cash flow of photovoltaic system: without incentive 0
-10,000 1 3 5 7 9 11 13 15 17 19 21 23 25

The bay back period) is 18 years. -20,000

NPV = 1649.5 Fig. 6 Cumulative cash flow of PV system: with 0.13 USD (kWh)–1
IRR= 4% feed-in tariff

Second scenario: The bay back period is 8 years

This scenario investigated other factors that might help NPV = 16323, IRR= 10%
make the project more cost effective. In this case, it was
assumed that the users will buy electricity from the grid at the TABLE 7. FINANCIAL PARAMETERS OF THE PHOTOVOLTAIC SYSTEM
tariff rate specified by the distribution company while the Financial Without With Feed-in
photovoltaic system generated electricity will be sold back to incentive tariff(USD 0.13/kWh)
the grid with feed in tariff, the Cash flow of this case is shown
in table 6. Internal rate of 4% 10%
return(IRR)
TABLE 6. CASH FLOW WITH INCENTIVE
Payback period 18 years 8 years
utility
bill C. Energy savings:
End Initial Inverter savings If all the houses of this segment install such a system, the
Maintenance
of investment replacement with will save 15800 MWh/month (3% of Khartoum state
cost USD
year USD cost USD inflation consumption) and they will feed the grid with (9.9 * 103) *
applied (17500 house) = 173000 MWh/year.
USD
0 16000 - - -
1 160 - - 1691.4
CONCLUSION
2 160 - - 1708.3
3 160 - - 1725.4 As we saw the solar photovoltaic system will provide a
4 160 - - 1742.6 fixed cost of energy over its 25-year lifetime which was paid
5 160 - - 1760.0 for in cash with levelised cost that is nearly the same as the
6 160 - - 1777.6 cost of consuming grid energy and will save money for the
7 160 - - 1795.4 consumer and energy for the utility.
8 160 - - 1813.4 This work shows that with appropriate government
9 160 - - 1831.5 incentives the photovoltaic energy can be boosted and
10 160 - - 1849.8 developed in Sudan; the results of the financial analysis
11 160 - - 1868.3 showed that the system will have a payback period of 18 years
12 160 - - 1887.0 if the electricity fed to the grid with a price as the electricity
13 160 - - 1905.9 taken from the grid. when the electricity is exported with FIT
14 160 - - 1924.9 rate that gives 10% rate of return the payback period was 9
15 160 - 5000 1944.2 years. so the country needs to develop policies for solar
16 160 - - 1963.6 systems to encourage their adoptance since there is no
17 160 - - 1983.3 regulated way to pay solar system owners for the electricity
18 160 - - 2003.1 fed to the grid.
19 160 - - 2023.1
20 160 - - 2043.4 The government subsidy makes other types of electricity
21 160 - - 2063.8 generation uncompetitive ,If the government remove the
22 160 - - 2084.4 subsidy, the cost of the PV technology will be more
23 160 - - 2105.3 competitive.
24 160 - - 2126.3
25 160 - - 2147.6
 ACKNOWLEDGMENT
We would like to thank the Energy research center
university of Khartoum for supporting this research and for
providing valuable data. We also thank Dr. Alwaseela Saeed
dean of faculty of Economic and social studies university of
Khartoum for his consultation and comments. Also thanks for
engineer Yahia Gaafer and engineers at renewable and
alternative energy directorate for their assistance.
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Photovoltaic Levelized Cost of Electricity, 2011.
[2] European Photovoltaic Industry Association, Global
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2014.
[3] M. S. Adaramola, Viability of grid-connected solar
PV energy system in Jos, Nigeria, 2014.
[4] (NASA)Surface meteorology and solar energy website.
[5] Sudanese Electricity Distribution Company.
[6] M. K. A. V. K. Kartina Hasim, An Economic
Evaluation of GridConnected Photovoltaic
Generation System for Residential House in Malaysia,
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[7] M. Y. B.Eng., Economics of Grid-Tied Solar in
Alberta, 2016.
[8] M. S. Adaramola, Techno-economic analysis of a 2.1
kW rooftop photovoltaic-grid-tied system based on
actual performance, 2015.
[9] M. A. AL-ODEH, Feasibility Study of Residential
Grid-Connected Solar Photovoltaic Systems in the
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[10] J. D. S. B. Mendonça M, Powering the green
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