Navigation:  Project design > Economic evaluation > Installation and operating costs

Costs dialog in economic evaluation defines all the initial charges and running costs of the system in order to calculate total investment, yearly cost and energy cost.

Costs can be defined globally, by pieces, by installed Wc or by m².

You can work with any currency, and pass from one to another by a selection in the list box. The button "Rates" allows to adjust their relative parity. Choosing one of them as a reference, you can manually modify or download from internet the exchange rates or add new currencies.

 

Installation costs

This section determines direct and indirect installation costs of the system.

This includes component costs (modules, inverters, batteries, pumps, controllers, generator), expenses for studies and analysis, administrative fees (grid-connection cost, bank charges, permitting, taxes), insurances, land costs, substitution credit and subsidies. The number and type of PV involved components (PV modules, inverters, batteries, etc.) are automatically updated from the simulation parameters.

 

 

Depreciable asset :

An installation cost can be defined as depreciable, meaning that during each accounting period, a portion of this cost will be deductible from income. Depreciation rules definition is performed in Financial Parameters dialog.

Component and accessories costs are set as depreciable by default in Pvsyst. To set another cost depreciable :

- click on a cost to select it

- click on edit button

- check the depreciable checkbox from the opening dialog

 

 

Add/delete/update costs

The predefined cost list is fully customizable to take into account any specific cost of your system which is not present in the predefined list. You can add, remove, reorder or rename costs. You can also save defined cost list as template in order to reuse them in another project.

 

                     Select all

                 Selects all the investment costs to be deleted, edited or moved.        

           Unselect all

                 Unselects all the selected costs. This button is disabled if no cost is selected.

    Move up

                 Moves up selected costs. The investment costs list displayed in the printed report uses this order. This button is disabled if no cost is selected.  

    Move down

                 Moves down selected costs. The investment costs list displayed in the printed report uses this order. This button is disabled if no cost is selected.

    Update cost

                 Opens the installation cost edition dialog to update properties (name, section, type) of a selected cost. This button is disabled if no cost is selected or more than one cost are selected.        

 

Operating costs

This section defines the annual running expenditures of the system.

 

The predefined cost list depend on the system type.

-For a grid-connected system, usually very reliable, they are limited to an annual inspection, eventually some cleaning of the collectors and the insurance fees. Some Inverter suppliers provide a long-term payable warranty, including replacement, which are assimilable to an insurance.  

-For a stand-alone system, one should add a provision for the maintenance and periodical replacement of the batteries. This last contribution is calculated by the program as a function of the expected lifetime of the battery pack, calculated by the simulation. Moreover, when using an auxiliary generator the program computes the used fuel cost.

-For pumping systems, there is also a provision for pump replacement, their lifetime being usually of the order of a few years. And of course for the batteries when used in the system.

 

As for installation costs, operating costs are fully customizable to fit the specific needs of your system. The total sum of operating costs is called OPEX (for Operational Expenditure).

 

           Select all

                 Selects all the operating costs to be deleted, edited or moved.        

           Unselect all

                 Unselects all the selected costs. This button is disabled if no cost is selected.

    Move up

                 Moves up selected costs. The operating costs list displayed in the printed report uses this order. This button is disabled if no cost is selected.  

    Move down

                 Moves down selected costs. The operating costs list displayed in the printed report uses this order. This button is disabled if no cost is selected.

    Update cost

                 Opens the operating cost edition dialog to update properties (name, section, type) of a selected cost. This button is disabled if no cost is selected or more than one cost are selected.        

 

Financial summary

 

The Total yearly cost is the sum of running costs and loan annuities (defined in Financial Parameters). It is an annual average value on project duration including the inflation rate if defined.

The LCOE (Levelized Energy Cost) is the price of the produced kWh. It takes into account the present value of future cashflows by applying a Discount Rate.

The formula used in Pvsyst for LCOE calculation is :

 

 

It  = Investment and expenditures for the year (t)

Mt = Operational and maintenance expenditures for the year (t)

Et = Electricity production for the year (t)

r = Discount rate that could be earned in alternative investments

n = Lifetime of the system

 

The Payback period is the duration required to recover the initial investment.