Green mechanism: Opportunities for corporate investment in PV/battery/diesel hybrid systems with techno-economic and environmental analysis
Moien A. Omar
Abstract
In rural areas, diesel generators are prevalent due to their lower initial cost, despite inefficiencies and carbon emissions. Transitioning to PV/Battery/Diesel systems offers a solution by reducing costs and emissions. However, the high upfront expenses present a significant barrier, particularly for rural communities, necessitating external financial support. This study evaluates the benefits of adopting a PV/Battery/Diesel hybrid system over traditional diesel generators in a rural community with 25 customers and a daily demand of 50 kWh. The proposed system includes a 12 kWp photovoltaic array and a 48 kWh battery bank, simulated using Hybrid Optimization of Multiple Energy Resources (HOMER) software. Results indicate a 91% renewable fraction and a cost of energy of 0.279 USD/kWh, substantially lower than the 1.05 USD/kWh of diesel-only systems, with CO 2 savings of 25 t per year. The paper advocates for a case study approach to green mechanism, urging energy and environmental companies to invest in these systems. By replacing diesel generators with hybrid PV/Diesel/Battery systems, companies can offer electricity at a reduced cost, driving adoption. Selling carbon credits from emission savings can generate additional income, leveraging CO 2 tax incentives. Under scenarios where investors cover 50% of diesel costs, selling electricity yields 9581 USD annually, and selling CO 2 credits generates 500 USD annually. This leads to a payback period of 9.83 years without CO 2 credits and 9.18 years with CO 2 credits, totaling 46,848 USD without CO 2 credits and 52,927 USD with CO 2 credits over the project's lifespan. Meanwhile, adjusting electricity pricing to 75% of diesel costs, this increases annual income from electricity sales to 14,372 USD. This reduces the payback period to 5.89 years without CO 2 credits and 5.66 years with CO 2 credits, totaling 105,094 USD without CO 2 credits and 111,174 USD with CO 2 credits at the end of the project.