Constructing a Hierarchical Learning Cost Curve for Photovotaic System

Abstract

Developing renewable energy is an effective approach to reduce global warming and satisfies increasing energy demands. Among all of the renewable energy sources, solar power has the greatest potential because it is derived naturally from the sun. Photovoltaic methods convert solar radiation into direct current electricity via semiconductors. Although the energy coming from the sun is abundant, the cost of generating electricity using photovoltaic methods remains higher than conventional means of generating electricity. Often, expensive manufacturing and installation costs reduce the benefits of photovoltaic systems. In order to encourage the usage of photovoltaic systems, several countries have used a feed-in tariff calculated based on the installation costs as an incentive. Considering this important incentive, a learning curve model is constructed to model the installation costs. The cost and benefit model helps evaluate profitability as well as determine the feasible buyback prices and future installation plans. There are many factors that influence the costs. Therefore, this study uses Taiwan as case study and develops a hierarchical installation cost learning curve model for photovoltaic facility construction. Finally, the progression rate, which represents the cost trend, is calculated using case data.