Investigation of the Economic Relationship Between Consumption Levels of Solar Photovoltaic and Grid Energy: Case Study of Specialised Power Systems Ltd

Abstract

The cost of electrical energy in Kenya has been on the rise causing enterprises to close shop and others to explore alternative ways of cutting down this energy cost. This project endeavoured to investigate the economic viability by considering the relationship between solar photovoltaic and grid energy using Specialised Power Systems (SPS) as a case study. The study established the capital investment costs for the solar PV and grid energy by preparing the bills of quantities in order to obtain the specific costs for each. The study also worked out the relationship between the solar PV and grid energy using regression equation based on the energy production data of the year 2019. The same was also worked out for the relationship between the energy consumed and the cost based on the secondary data for the year 2021. It was noted that solar PV capital investment costs were quite substantial as the rate for the various items required to harness solar PV energy were expensive. Grid energy capital investment was found to be very much less than the solar PV. The initial capital investment costs for solar PV was quite high but the running costs were very minimal according to SPS. The predictive relationship indicated that there was insignificant difference between the solar PV and the grid energy coefficients. The study also established that there was a strong correlation between the consumed energy and the energy cost. Since consumption was significant in influencing the total cost, it was important to know the proportions of generation from solar PV and from grid so as to manage the total cost of energy. The suitability and adoption of solar PV energy relative to grid energy was determined based on the 2019 and 2021 energy consumptions which showed that the benefits of the relationship captured using return on investment works out to be positive. The calculated pay back period was found to be approximately 10 years assuming constant savings. The study therefore confirmed that there was a saving when SPS invests on solar PV energy and hence the importance of making sure that the same was maintained to ensure production of energy from the sun. This implies that the investment on solar PV energy will cut down on costs brought about by rise in electricity cost