Analysis of the Profitability of Investment in Renewable Energy Sources on the Example of A Semi-Detached House

Abstract

The paper presents an analysis of the profitability of investment in a selection of systems based on renewable energy sources on the example of a semi-detached house with a floor area of nearly 150 m2. The analysis was conducted in three variants:1) the application of a biomass boiler, solar collectors and photovoltaic panels; 2) a heat pump, solar collectors and photovoltaic panels; 3) a heat pump, solar collectors and a wind turbine. Next, the proposed solutions were compared with a traditional heating system featuring a gas-powered boiler and obtaining electricity through the power distribution grid. The investment and operational costs were calculated after the selection of the appropriate equipment. The example under analysis indicates that variant 3 entailed the highest investment costs (the purchase and fitting of a heat pump as well as the drilling required to install underground pumps). Traditional technical solutions were proven to produce the highest costs. The investment profitability analysis was conducted using both the simple and discounted methods of evaluating profitability. It was established that variant 3 yielded the shortest discounted payback period-less than 13 years. It is estimated that the investment will reach the break-even point after this time. As a summary, it must be noted that the profitability of a given investment depends on the adopted technical solutions. Due to high initials costs, investors often lack interest in the purchase and installation of renewable energy generation systems; however, the contribution of the investors can be lowered with the use of subsidies and price reductions regarding the installation of renewable energy generation systems. We can observe a decrease in the price of the most popular and efficient renewable energy systems.