Licensed Land for PV solar investment
An Opportunity to invest in a Solar energy project in Turkey, there is a licensed land in the southern part of Turkey which is ready for a Photovoltaic project. Photovoltaic suppliers in Turkey get FiT (money) from Turkish government about ($ 0.2 – 0.13) per kWh.
Photovoltaic project in Turkey
Photovoltaic (PV) technology is blooming energy nowadays due to improving the cells efficiency, reducing the cost and global concern about the green energy. Government of Turkey encourages installing PV systems by paying 0.133 $/kWh plus a bonus of 0.067 $/kWh for PV systems uses local products. Our PV project will be installed in the southern part of Turkey where the yearly shining hours are high (more than 2900 sunshine hours yearly). For Example, in Adiyaman city the solar irradiance is 1530 kWh/m2 / year. The capital cost for the project is 7,800,000.00 $. Yearly income from the project is 1,452,000.00 $, and the project payback period is 5.4 years (this is only an example which may change from time to time).
Feed-in Tariff mechanism
Feed-in Tariff (FiT) is one of the most popular mechanisms applied to encourage the increase of the growth of renewable energy sources. The FiT mechanism allows electricity produced from an indigenous renewable energy source to be sold to authorized power utility companies at fixed premium price for a specific duration. Turkey introduced FiT in 2010 with the goal of covering 30% of the electrical grid from renewable energy resources by 2023. The renewable energy resources included in FiT in Turkey are: PV, wind and hydropower, biomass and geothermal. The FiT supported period for PV sources is 10 years. The period of time for the support mechanism was extended from December 31, 2015 to December 31, 2020 as the Electricity Market Regulatory Authority (EPDK) aiming to install more renewable energy projects.
FiT mechanism in Turkey pays 0.133$/ kWh produced by Photovoltaic units. A bonus will be given to the system use locally produced equipment this can increase the rate up to 0.2$. The local equipment bonus in Turkey is available to the investor for the first 5 years. Figure 1 below shows the FiT amount and the electricity tariff.
Figure 1 FiT amount and the electricity tariff
The penetration of renewable energy resources (RESs) in power system increased dramatically last few years. Even though, micro-RESs used widely in MICROGRIDS due to their simplicity and low capital cost, the large scale RESs attracted investors and operator’s attention due to their competitive features such as; high clean energy integration and lower cost per installed watt. Many large scale projects implemented worldwide integrated different types of DERs, storage device and loads. This project propose large scale Photovoltaic project connected to the public grid.
For any project more than 1 MW, the investor has to get license from Electricity Market Regulatory Authority (EPDK) to inject the power to the public grid and get the tariff from them. Another license has to be issued for the land itself in order to use it for PV project. Licensing process takes from 1 to 2 years. ENERGCO already has few land that got the license and ready to install the PV project and inject to the public grid.
- Licensing process 1 to 2 years (we already have licensed lands)
- PV system installation 8 months
- Connection to grid 1 month
|Task||1 to 2 years||8 months||1 months|
|PV system installation||——-|
A large area of Turkey is suitable for the utilization of solar energy because the country is geographically well situated with respect to solar energy potential. It is located on the South east corner of the European and Midwest border of the Asian continents and lies in between the latitudes of 361 and 421 N. According to the sunshine duration and radiation data measured by the Turkish State Meteorological Service from 1971 to 2000, Turkey’s annual mean total sunshine hours number 2573(the daily mean is 7h), and the mean total radiation is 1474 kWh/m2-year (daily4kWh/m2). The global irradiation and solar electricity potential for Turkey are shown in Figure 2. The colour legend in the figure helps to visualize the potential global horizontal irradiation in the region.
Figure 2 The global irradiation and solar electricity potential for Turkey.
C Installation Cost
F Annual FiT Income
AF Annual Income After FiT (after 10 years)
R Annual Revenue
Ra10 Annual Revenue after 10 years
ET Annual Electricity Tariff income (average 0.4 TL, 0.12$)
TR Total Revenue for first 10 years
TRa10 Total Revenue for second 10 years
M Maintenance Cost
T Contract Duration
TP Total Profit
PP Payback Period
ROI Annual Return on Investment
ROI = (R*100%) / C
The calculation done based on below assumptions:
- No loan is taken to fund the project.
- The solar panel maintains 100% performance during its contract period;
- The maintenance cost is 1 % of the capital cost for the first 10 years and 2% for the next 10 years
- The calculation will be done for the duration of contract period, i.e. 10 years for the installation in Turkey.
- Estimated losses due to temperature and low irradiance: 11.7% (using local ambient temperature)
- Estimated loss due to angular reflectance effects: 2.6%
- Other losses (cables, inverter etc.): 14.0%
- Combined PV system losses: 26.1%
- Solar irradiance city1530 kWh/m2 / year
- There is no increase in electricity tariff
- Project capacity is 5 MW
F = 1530*0.2*5000 (kWp capacity of the station) = 1,530,000.00 $
ET = 1530*0.12*5000 = 918,000.00 $
R=F-M= 1,530,000.00 $ – 0.01*7,800,000.00 $= 1,452,000.00 $
Ra10=ET-M = 918,000.00 $ *0.02*7,800,000.00 $= 762,000.00 $
TR=R*T = 1,452,000.00 $ * 10 = 14,520,000.00 $
TRa10=Ra10*T = 762,000.00 $ * 10 = 7,620,000.00 $
TP=TR+TRa10-C = 14,520,000.00 $ +7,620,000.00 $ – 7,800,000.00 $ = 14,340,000.00 $
PP=C/R = 7,800,000.00 $ / 1,452,000.00 $= 5.37 years
ROI = (R*100%) / C = 1,452,000.00 $*100% / 7,800,000.00 $ = 18.6%
Bilal Mouneir is working in research and development in University of Malaya/Malaysia since Jun/2010. He is the person in charge about many projects such as; “Development of Battery Charger For Plug-in Hybrid Electric Vehicle,” “Malaysian Building Integrated Photovoltaic Technology” project Number and “Campus Network Smart Grid System for Energy Security.” Dr. Bilal is a reviewer for many publishers such as IEEE, Elsevier and Springer since 2013 till now. Dr. Bilal using an advanced software (such as Aurora, Matlab) to generate feasibility studies for the Photovoltaic project costumes. The reports include full electrical design and financial analysis. Working as freelancer allowed him to understand the firm directors and decision makers thoroughly. He has an excellent experience in business development. Below the summary of the experiences he gained for two businesses he developed:
- My experience as a manager of NUR ASIA gave me the ability to manage and coach my team to achieve the objectives and create the perfect organization image. Negotiating with public relation manager from other universities to sign MOA, gave me the opportunity to get familiar with decision maker needs. Both face to face and online marketing (social media and AdWords) are an important skills that I have, which make me talented in sales skills. The company website is nooorasia.com.
- ENERGCO is leading company in the electrical energy sector. We provide professional training, consultation and installation services for projects related to electrical and Renewable energy. We mainly focus on the resources that have the hugest impact on our Energy security as Photovoltaic and Wind. My experience as a manager of ENERGCO gave me the ability to coach my team to achieve the company objectives. Negotiating with investors and company managers, make familiar with decision maker needs.
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