An assessment of financial worthiness for Solar Cell Rooftop : The case study of Sawn Timber Hevea Wood Factory in Trang Province

Abstract

This paper aimed to study the cost and benefits, and to analyze the capital budgeting, of a solar rooftop installation project at One Sawn Timber Hevea Wood Factory in Trang Province. The analysis criteria included the Net Present Value (NPV), the Benefit and Cost Ratio, the Internal Rate of Return (IRR) and the Discounted Payback Period; including with the Unit Cost per Watt and the Cost of Product. The scope of the analysis covered direct effect, direct effect plus indirect effect on tax, and direct effect plus indirect effect on peak demand value. The result of the study showed that a large factory has comparative advantages on Unit Cost per Watt and Cost of Product thanks to the economies of scale; the higher the power generating capacity, and the lower cost per unit. The costs were 2.32, 2.69, and 3.08 baht per unit for power generating capacity more than 100kW, 51-100 kW, and 11-50 kW, respectively. These cost values were all below that of the peak demand value of 4.21 baht per unit. As for the project’s payback period, the fastest was 5.59 years with the power generating capacity more than 100kW. In addition, when analyzing the capital budgeting by applying the Net Present Value, the Benefit and Cost Ratio, the Internal Rate of Return, and the Discount Pay Back Period, the result revealed that the installation of the solar power system for the Sawn Timber Hevea Wood Factory in Trang Province was worthwhile. We also examined the sensitivity in 4 cases; loan rates increases, inverter reduced lifespan, solar cells increased deterioration values, and seasonal reduction of electricity production. Our findings could be very supportive in case the government wishes to bring this study’s results to create campaigns encouraging the factories to utilize alternative energy such as solar power in the future.