TY - GEN
T1 - Photovoltaic power purchase agreement valuation under real options approach
AU - Isaza Cuervo, Felipe
AU - Arredondo-Orozco, Carlos Andrés
AU - Marenco-Maldonado, Gabriela Carolina
N1 - Funding Information:
This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
Publisher Copyright:
© 2020 Elsevier Ltd
Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.
PY - 2021/3
Y1 - 2021/3
N2 - Renewable energies are an alternative to explore new business models in Colombia, especially when the new regulation associated with Law 1715 is considered. In this work the financial feasibility of a power purchase agreement (PPA) that uses photovoltaic energy is analyzed from the perspective of a non-traditional investor. In this paper, the financial feasibility of a PPA business was analyzed considering some of the benefits offered by Law 1715 through the use of discounted cash flows and real option analysis. The results show that tax benefits (included on Law 1715) improve the feasibility of this business models in Colombia, nevertheless, the defer option value suggest the convenience of delaying the investment. This work contributes to the analysis of the effect of the renewable energy policy incentives and the development of new business models based on renewable energies and the analysis of decisions that help include photovoltaic energy in Colombia.
AB - Renewable energies are an alternative to explore new business models in Colombia, especially when the new regulation associated with Law 1715 is considered. In this work the financial feasibility of a power purchase agreement (PPA) that uses photovoltaic energy is analyzed from the perspective of a non-traditional investor. In this paper, the financial feasibility of a PPA business was analyzed considering some of the benefits offered by Law 1715 through the use of discounted cash flows and real option analysis. The results show that tax benefits (included on Law 1715) improve the feasibility of this business models in Colombia, nevertheless, the defer option value suggest the convenience of delaying the investment. This work contributes to the analysis of the effect of the renewable energy policy incentives and the development of new business models based on renewable energies and the analysis of decisions that help include photovoltaic energy in Colombia.
UR - http://www.scopus.com/inward/record.url?scp=85100105363&partnerID=8YFLogxK
U2 - 10.1016/j.ref.2020.12.006
DO - 10.1016/j.ref.2020.12.006
M3 - Artículo
AN - SCOPUS:85100105363
SN - 1755-0084
VL - 36
SP - 96
EP - 107
JO - Renewable Energy Focus
JF - Renewable Energy Focus
ER -
