Total lifetime costs of photovoltaic (PV) systems are important determinants of profitability. But such costs are not always accurately measured and compared against fluctuating electricity costs, which can be an important contributor to long-term profitability. In this paper, we consider the economics of concentrated photovoltaics (CPV), which offer significantly higher efficiency and greater energy production over traditional fixed flat-plate PV installations in high-irradiance regions, but are perceived to be risky investments.
Working with two models, one a simple annual model that uses only direct normal solar insolation; the other a more complex hourly model that uses direct normal solar insolation, ambient temperature, and wind speed to predict energy yield, we calculated the energy production and corresponding revenue generation for a 28 kW CPV unit and a comparable single-axis tracker field in Nevada. Our resulting cost matrix shows how much revenue a CPV system can reasonably be expected to generate under different pricing schemes and time periods. While the values vary depending on the assumptions made, the matrix provides an index of profitability, enabling prospective buyers to compare the costs of purchasing, installing and maintaining a system against likely revenue.
As a result of our calculations, we anticipate that CPV systems will still be viable in high flux areas because they offer the promise of profitability now and continued or increased profitability as cell costs decrease and/or overall efficiency increases. Nonetheless, other factors, such as long-term reliability and O&M costs, must be addressed if CPV is to compete with other simpler technologies, such as single-axis PV trackers, which have lower upfront costs and are therefore becoming more attractive to potential customers.