What should be the total installed cost W peak0 of a PV syst

What should be the total installed cost ($/W peak0 of a PV system so that it can generate electrical energy at a cost of 15 cents/k Wh? Assume an annual interest rate of 10%, 20-year amortization, O&M; cost of 2% capital per year, and an annual energy production factor of 0.2.

Solution

Let the Total installed cost (Capital Cost) of PV system be $ X / W;

The generation of electricty is 15 cents/kWh = 0.015 cents/Wh;

We know generation cost is = Total cost of the PV system/Total units generated over life time.

Total Cost of PV system = Total installed Cost (Capital cost) + O&M Cost + (Interest + Principal Amount/year)

Given total units generated per year = (0.2*1000*(W peak installed)*365*24 / year ) *20 ;

0.00015 = (X + 0.02*X + 0.1158*X)/(0.2*1000*365*24)

Capital cost = 231.37 $/year;