Comparative Cost-Benefit Analysis Of Hybrid-Solar System Using Net Metering: Case Study Of Kyagalanyi Coffee Factoryuganda

Abstract

In the business arena especially industries, energy has a very big role and direct impact on the production cost of any given product. Reduction in the amount of energy consumed to produce a unit product has a direct influence on its market price thus competitiveness and more benefits to the manufacturer. This reduction can best be achieved as a result of efficient and conservative use of energy. For the past 12 years in Uganda, there has always been increments in the electricity tariff rates. This increment has led to hiking of the end-users’ electricity bills and thus making their products more expensive compared to the same imported goods. This study aims at devising a means of reducing energy bills of industrial customers through energy integration and net metering. This was done by designing an alternative solar hybrid system for Kyagalanyi Coffee Limited using HOMER software. The system is compared with the common one in Uganda of grid backed up with a generator. A saving of $668,033 is recorded throughout the project life of 25 years with a discounted payback time of 10.9 years. HOMER results were validated, with net metering analysis using 2015 as a baseline year. From the analysis, Kyagalanyi Coffee Limited is saved $195,484.6 within one year. If factors are to remain the same throughout the project life time the payback period of the system will be 9.9 years using HOMER’s total Net Present Costs (NPC). This is in agreement with HOMER’s results considering grid alone. Considering only the initial capital investment of the system, the simple payback reduces to 5.5 years. Taking 1% as the annual PV degradation due to aging and soiling effects, the payback becomes 10.4 and 5.6 years using the system’s total NPC and initial capital respectively. Therefore, this study recommends industrial customers to invest in distributed generation systems for self-consumption and the government to support them through establishment of net metering policies.