Researchers from Sweden and Italy modelled the profitability and cost-effectiveness of several types of agrivoltaic (APV) systems for European cropping practices and locations.
The model predicted the profitability and cost-effectiveness of each agrivoltaic system using key performance indicators such as net present value (NPV), discounted payback period (DPBP) and levelised cost of energy (LCOE).
This approach provided a comprehensive economic assessment that will support decision-making on agrivoltaic development across Europe.
Unlike several previous studies that focused on a single system type, crop rotation, specific sites, and specific costs or revenues, the study aimed to provide a more comprehensive analysis of the economic performance of agrivoltaic systems.
The analysis revealed that above-ground agrivoltaic systems performed better than vertical systems. This improvement was due to higher electricity production and higher electricity prices, which offset the higher initial investment costs.
Under the study's assumptions, the single-axis system had higher profitability and cost-effectiveness across Europe than vertical and elevated systems. The LCOE of the single-axis system was 20–25% lower than that of the vertical system and 30% lower than that of the elevated APV system, which, according to the research, indicates higher cost-effectiveness in electricity production, while the NPV is ‘mostly positive’ across Europe for single-axis, vertical and elevated systems.
In addition, the DPBP for the single-axis system was 25–30% faster than for the vertical APV system and 35% faster than for the elevated APV system. Furthermore, the single-axis APV system had a shorter DPBP and lower LCOE than the reference conventional ground-mounted photovoltaic systems.
In Germany and Italy, elevated APV systems have higher profitability than vertical systems, as their higher electricity output compensates for the higher costs associated with their installation.
In Sweden and Denmark, vertical systems show higher profitability, with systems located in Denmark offering ‘significantly higher profitability due to higher electricity sales prices’.
Furthermore, it was found that the average crop rotation profit is the ‘most important parameter’ influencing agricultural NPV, while the LCOE of a project is primarily influenced by photovoltaic system-specific costs, operating and maintenance costs, and real WACC.