United States Solar Investment: A Feasibility Study of Solar Farms in Kentucky

Abstract

The United States is experiencing a large growth in the solar sector. The U.S. solar power capacity has grown from 0.34 Gigawatts (GW) in 2008 to an estimated 97.2 GW today. However, some states have had difficulty installing large scale solar farms due to concerns regarding geographic location, political climate, or economic factors. Kentucky (KY) is one of the states which is below the national average for solar energy production. However, KY contains a wealth of potential for these types of farms with decent solar irradiation levels and large tracts of unused land for solar farms. For the study, this paper selects three representative areas of KY by using PVWatts and topographical maps which can theoretically produce enough electricity so that KY can meet or exceed the national generation percentage average (2.3% or 2.06 TWh annually in KY’s case). The study analyzes the economic feasibility of solar photovoltaic systems (PV) farms in terms of Cumulative Cash Flow ($) and Payback Time (Year) by using the Cost of Renewable Energy Spreadsheet Tool (CREST). Furthermore, this paper estimates the Average/Median/High output power (kWh) annually for the scenario among three areas in Kentucky, Smithland, Hickman, and Falls of Rough. In this theoretical scenario, an average 2.27 TWh would be generated annually which exceeds the national generation percentage average. Furthermore, by the sixth year, the cumulative cash flow would exceed the breakeven point, proving the feasibility of these solar farms. The annual average power generation estimates for the areas of Smithland, Hickman, and Falls of Rough are 0.3741 TWh, 1.1628 TWh, and 0.731 TWh respectively. The average profit per MWh estimates for the areas of Smithland, Hickman, and Falls of Rough are $11,130.12/MWh, $10,742.46/MWh, and $11,392.01/MWh respectively. According to CREST, the final cumulative cash flow, after the 25-year life span of the panels, would be approximately $624,566,720.