THE STUDY OF THE FINANCIAL VIABILITY OF RESIDENTIAL SOLAR ROOFTOP INVESTMENT IN THE CENTRAL REGION OF THAILAND

Abstract

The objectives of this research article were to (1) to study the financial viability of Residential Solar Rooftop Investment in the Central Region of Thailand, (2) to examine the switching value test and analyze the risk of Residential Solar Rooftop Investment in the Central Region of Thailand. In this study, the net present value (NPV), internal project rate of return (IRR), and payback period were calculated. Then, it assessed the financial viability of the investment and performed a sensitivity analysis for changes in cost and revenue. It also conducted the switching value test for changes in the power purchase rate, electricity consumption, and investment cost.

The result of the study found that: The baseline results of the financial viability analysis with a debt-to-equity (D/E) ratio of 50:50 indicated that the project was not financially viable. However, when the study assessed a sensitivity analysis with the D/E ratio of 0:100, the result was a weighted average cost of capital (WACC) of 2.35%, so the results indicated that the project was financially viable.

The results of the switching value test showed that the investment project was financially viable when the power purchase rate was no lower than 3.1927 baht per unit, or the electricity consumption was no less than 36,420.89 units per year (or 3,035.07 units per month), or the investment cost was less than or equal to 144,870.64 baht.