Journal of pure and applied sciences,

2008, Nwafor orizu college of education nsugbe,

Anambra state.

FEASIBILITY STUDY ON THE PROVISION OF SOLAR ENERGY

IN RURAL AREA USING SOLAR PANEL
Okafor, Emeka C.
Abstract
This work attempts to satisfy the desire to meet the energy demand in schools and
most rural areas , Net Present Value (NPV) and Internal rate return (IRR) were
employed in determining the economic viability of solar panel installation in a
rural area for the purpose of providing alternative renewable energy to the rural
dwellers. The study was done in Umuazu Village, Nise, Awka South L. G. A of
Anambra State which has an estimated population of 1000 people and 50
buildings. The result obtained showed that the installation of solar panel in rural
area is commercially viable.
Key words: Solar Panel, Net Present Value, Renewable Energy, Internal Rate of Return
Introduction:
Presently various kinds of energy sources play important role in the life of
man. Consequently, the natural energy resources had been depleted. This is due to
rapidly increasing population growth rate and utilization of energy. But luckily, new
sources of energy have been found. The production of electricity can be done using
different kinds of technology and using natural resources like oil, gas and hydro
energy. Some of these cause high exertion of energy resources and also effect the
environment. As a result, new kinds of energy sources are gaining more attention.

Solar energy is the one that receives most attention, because energy conversion
process from solar energy to electricity is clean and it does not cause any impact on
the natural environment. It is easy to put this energy system into use in villages,
islands, school and homestead where electrical power transmission line systems and
sometimes railways are not available or inefficient.
We can store the electric current that is produced from Solar energy systems in
batteries and bring it to use in the night. Electricity production from solar system has
more advantages over other energy systems such as nuclear power, hydropower and
diesel engine power, if they are compared in terms of investment cost, transmission
cost, land cost and environmental cost. The question now is why is the
manufacturer of solar panel for the generation of electricity very unpopular?
History of solar energy:
The earth receives solar energy at the rate of 5.41024J/yr. This is equivalent to
about 30,000 times the sources of energy used now on earth. Harnessing this required
knowledge of the nature of solar insulation. Radiation is emitted from the sun with an
energy fairly similar to that of a black body or perfect radiator, at a temperature of
6000K. Radiation travels with a velocity of 3108m/s taking approximately 8
minutes to reach the earths atmosphere. About 8 minutes after leaving the surface, it
travels at 300,000 km/s2 to reach out to the orbit of the earth. It then passes through a
surface 150 million kilometers in radius. However, not all of it reaches the earths
surface, this is because of a number of complex interactions in the atmosphere. These
interactions with the atmosphere reduce the intensity of solar radiation at the surface

so that the intensity at the surface is a little more than half that at the top of the
atmosphere.

How it works:
The photovoltaic cells were developed at Bell Labs in 1950 primarily for space
applications. Today, solar photovoltaic (PV) systems are at work, converting the suns
radiation directly to electricity. Photovoltaic (PV) cells convert sunlight directly to
electricity by passing through thermodynamic cycles and mechanical generators. PV
stands for photo (light) and voltaic (electricity), whereby sunlight photons free
electrons from common silicon cells. In other words, when sunlight strikes the solar
cell, electrons (red circles) are knocked loose. They move toward the treated front
surface (dark blue color). An electron imbalance is created between the front and
back. When the two surfaces are joined by a connector, like a wire, a current of
electricity flows between the negative and positive sides. Hence, these individual
solar cells are arranged together in a PV module and the modules are grouped
together in an array. Some of the arrays are set on special tracking devices to follow
sunlight all day long.
When sunlight falls on the surface of a silicon cell, it brings about the flow of
electrons. Solar energy consists of photons. The energy from the photons is
transferred to electron in the semi-conductor within the solar cells, until it reaches an
excited state. This allows more conductivity with positive and negative charges
which are the electron and the hole Therefore, when the solar cells are connected to
3

our electrical appliances there is electricity within the circuit. The electricity from
solar cells is direct current and must be transformed to alternating current (AC),
before it can be useful with household appliances. This can be done using an inverter.

Advantages Of Using Solar Cell

a.

Easy to install and can be done by yourself.

b.

Repairs and maintenance is least needed.

c.

Operates automatically.

d.

Clean, causes no pollution.

e.

No smells, noise vibration and overheats

Disadvantages of using solar cells:

a.

The energy from solar cells depends on the amount of light from the sun,
which in some circumstance is not dependable.

b.

Not usable on cloudy days

c.

Household must have large roof area to install the equipment.

d.

The roofs with solar cells should be faced to the south

e.

The roof must be free of shadows from other objects or buildings

According to Bahm (1996), the challenges to the designer of solar energy systems
include the following
1.

To forecast the availability of solar energy at some time in the future, and
then to provide means to capture the energy, and store it when necessary, so
that it will be available when needed.

2.

To make a device to capture the solar energy in the form of radiation and to
convert it to a useful form of energy.

3.

Although the concepts of collection and storage of solar energy are simple,
these collections and the storages must be built with real materials, and
must compete economically in a world, which already has expensive
energy.
According to Cecilia (1999) at the Florida solar center in cocoa, Generating

power with

the sun via photo voltaic sounds promising, but can this costly

technology actually live up to the hype in real world? Yes and yes, at least in hot
climates. Solar PV modules have a record of extremely reliable service. For over 25
years they have successfully provided power for long-range space vehicles and
permanent space satellites Also according to Siemens-Solar (2000), all modules
are designed and constructed to ensure continuous reliable performance and even
during harshest weather conditions

Solar Power Made Easy

In a significant step forward for photovoltaic technology, advance energy
system and technology have independently introduced PV panels that feature built-in
micro inverters. The small 250 watts micro inverters allow the panels to act as AC
generators, thus eliminating the need for direct-current wiring and an in-home
inverter to convert DC current. In addition, because the micro inverters are built into
each panel, homeowners can start with a small system and add on. According to
Tim (1999) Chairman of the UF chemical energy Department They have a more
complex structure and require more complicated processing. Our role is to better
understand the processing and transfer the technology, to industry
5

Maintenance
Future maintenance is simplified if solar powered systems are introduced in
clusters rather than in isolation. For example, for a domestic Lighting system at least
25 panels shall be introduced in an area. It is possible to then train and pay an
individual to carry out preventative maintenance on all these systems. This person
will also act as a connection point between the supplier and user and will facilitate
communication. Regular service maintenance is essential, if neglected the system
will fail within a year.
Usage Of Solar Cells
Solar cells are adapted to suit various kinds of jobs such as:
a. Transportation - for traffic light, emergency telephone, public lighting
b. Air - for obstruction light, navigator lamp
c. Telecommunication - charging batteries
d. Aerospace - satellites
e. Agricultural - pumping for irrigation, drying fan
f. Livestock - electrical fence, water pumping
g. Aquaculture - Hatchery, lure fish lamp
Solar Cell Market In Nigeria
Only few organizations in Nigeria are into the sale of solar panels.
Organizations like Solar mate Engineering Limited, Lagos, and this is because the
Technology is relatively new from the Go Solar Company in America, California
U.S.A. As at today, the panel model part number and their prices are as shown below
in table 1.0
6

Table 1.0: Prices/Quotations of Some Solar Panels.

PART NO.

SHELL SM SERIES

RATE ($)

SM50-H

SM50-50W 12V

272.60

SM55

SM55-55W 12V

295.80

SQ75

SQ75-75W 12V

316.00

SQ80

SQ80-80W 12V

337.23

SM110-12

SM110-110W 12V

479.40

ECONOMIC VIABILITY ASSESSMENTS

In order to determine whether the project is viable, we would attempt to determine the
i.

Net Present Value (NPV)

ii.

Internal Rate Return (IRR)

Steps In Calculating Total Load Demand Of Umuazu Village

We have approximately 50 building in the village with an estimated population
of 1000 people
Table 2.0: Estimated House Electricity Consumption at Umuazu Village
Appliances
No of hours used
Total (W/House)
100W Television

5 hrs

500

236 Fluorescent

5 hrs

360

360W Bulb

10 hrs

1,800

100W of other load

5 hrs

500

Total

3160 W/House

Total wattage per house = 3160W/House

Approximate total W/House for 50 buildings

= 158,000W/House
= 158 KW/House
7

Unit Consumption of Electricity Each Day

Unit of electricity

= summation of W/House
1000
= 158000 = 158 unit/day
1000

Calculating the Maximum Power Allowance Gained from Solar Each Day
Power of cell= unit of electricity 1000
QABC/D
Where,
Q

= unit of solar electricity in a day, it is about 4000W/m2

= loss compensation of cell factor (is about 0.8)

= loss of heat factor (is about 0.85)

= efficiency of inverter (is about 0.85)

= Sunray intensity (is about 1000 W/m2)

Power of cell= 1581000

_
(40000.80.850.85)
1000

158.000
2.3112

=68,339W Approximately 68.3KW

Selecting the solar cell from solar mate company model SQ 120, amorphous type
120W, 12V, 6.67A, use area = 741.2136.1 mm2 per panel. Also selecting an
inverter input voltage of about 170-230V and output voltage 220V, 50HZ frequency.
Calculating the Quantity of Solar Panel and Sequential Installation
A. The solar cell has limited power of 120W
No of solar cells = total power of cell
Power of cell
= 68340 W
=
569.5
120W
= Approximately 570 solar Panels
B. The solar cells have limited voltage of

=12V
8

The inverter used has input voltage

= 200V

Therefore number of sequence connections =200

= 17 panels
12
Calculating the No of Parallel Connections (NPC)
NPC =
Total no of solar panels
No of sequence connection
=
570 = 33.5 Approx. 34 rows
17
Therefore, from calculation we need to install solar cell in 34 rows with each row
consisting of 17 panels. Total solar cells is 3417 = 578
Total capacity = 578120 = 69,360W Approx. 69.4KW
Input voltage each row

= 1712

= 204V

Total current each row

= 346.67

= 226.78A

The Used Area of Installation

= (170.7412) (34136.1)
= 12.60044627.4
= 58307.09 mm2, approx. 58.3 m2
Calculating real power gain from installed solar Cell
Unit of electricity = (power of cell QABC)
D1000
= 6936040000.80.850.85
10001000
=160,360,320 = 160.4 Units/Day
1x106
From the solar mate engineering Ltd, Lagos the price solar cell model SQ 120 is
12,000 Naira

Table 3.0: Inventory of Project Materials

S/N

Item description

1
2
3
4
5
6
7.

120Watts Solar Panel

12/220V Inverter
4a/12V Controller

Quantity
Required
578
1
1
5
3

38Ah Rechargeable Battery

Module mount
Miscellaneous
Civil Work/Fencing
Total

Unit cost
Total
(N)
(N)
12,000.00 6,936,000.00
15,000.00
15,000.00
15,000.00
15,000.00
9,000.00
45,000.00
1,500.00
4,500.00
3,000.00
3,000.00
100,000.00 100,000.00
7,118,500.00

OPERATIONAL COST
Table 4.0: Staff Salaries
Position
General/admin manager
Commercial manager
Account clerk
Security Manager
Computer analyst
Total

Number
Required
1
1
1
1
1

Salary/Month
(N)
30,000
20,000
20,000
8,000
10,000
88,000

Table 5.0: Overall Operational Cost

S/N
1
2

Description
Admin overhead
Admin wages
Total

Amount (N)
20,000
88,000
108,000

Operating cost per month = N 108,000

Annual operating = N108,000 12 = N 1,296,000
REVENUE ESTIMATE
Electricity Sales Revenue: The sale of electricity to the rural area by the
Power Holding Company Nigeria Plc (PHCN) is N1.50/KWhr. Apart from the
revenue accrued from the sale of solar energy: revenue can also be generated from
10

the sale of carbon credits. Not surprisingly, it is difficult to say what the price of
carbon will be since there is not yet a functioning carbon market. There is an
emerging market in generic carbon offset, and a market for the future.
Electricity Sales Revenue Based on the Tariff to the Rural Area in Nigeria will
be as Calculated Below
The estimated revenue accrued per annum will now be calculated as follows
1.50 158KWh 365 = N86, 505 per annum
KWhr
Here, it is estimated that about 50 customers will benefit from the project. Thus total
revenue accrued = N 86,50550 = N4,325,250.00
ANALYSIS OF PROJECT VIABILITY
I. Net Present Value (NPV)
In evaluating the net present value of this project, the following assumptions are
made
1. The revenue accrued (Cash Inflow) annually from the generation of electricity
is N 4,325,250.00
2. The cost of capital for the project is estimated at 20% based on the prevailing
interest rate on lending as in the country (CBN published financial
standard, January 2004)
3. The annual operating cost for the generation of electricity is N 1,296.000.00
Here we set up the net present value computation using the table 6 below

11

Table 6: Present Value Computation at 20% discount

Year
Cash
Cash out
Net out
Discount
Present
inflow N M flow N M
factor
value N M
20%
1
4.33
1.296
3.03
0.833
2.52
2
4.33
1.296
3.03
0.6944
2.10
3
4.33
1.296
3.03
0.5787
1.75
4
4.33
1.296
3.03
0.4823
1.46
5
4.33
1.296
3.03
0.4019
1.22
Total
9.05M
Present value of cash flow = 2.52 + 2.10 + 1.75 + 1.46 + 1.22 = 9.05m
Net present value = (present value of cash flow)-(initial cost)
= (9,050,000) (7,118,500)
= N1,931,500
This value indicates that the solar energy generation project is commercially viable.
Profitability Index (P.I) = present value of cash Flow
Net amount invested
=9.05M
= 1.3
7.119M
COMPUTATION OF INTERNAL RATE OF RETURN
Discount At 30%
Year
Net cash flow
Present
Net
Initial cost
value at N1 present
value
1
3.03
0.7692
2.33
7,118,500
2
3.03
0.5117
1.79
3
3,03
0.4552
1.38
4
3.03
0.3501
1.06
5
3.03
0.2693
0.82
Total
7.38
COMPUTATION OF INTERNAL RATE OF RETURN
Discount At 35%
Year
Net cash
Present value at Net
Initial Cost
flow
N1
Present
Value
1
3.03
0.7407
2.24
2
3.03
0.5487
1.66
7,118,500
3
3.03
0.4064
1.23
12

4
5

3.03
3.03

0.3011
0.2230

0.91
0.68
6.66

Total

COMPUTATION OF INTERNAL RATE OF RETURN DISCOUNT AT 35%

Interpolating between 30% and 35% we have

(7.38 7.119)
(7.38 7.119) + (7.119 6.66)
= 0.261
0.261 + 0.459

(35 30) %

5%

= 0.363 5% = 1.8%
1.8% + 30% = 31.8%
Return on investment for the five years is 31.8%, this rate is far above the interest
rate on lending which is 20%
Payback Period =
=

Cost of Project
Annual Saving
7.119
4.33
=1.6 years

Conclusion
From the results obtained, we have to make an initial investment for solar
system to the tune of about N7, 118 5000.00 with unit of electricity tariff of about
N1.50/kwhr. The results obtained were quite reasonable. This indicates that these
installations of solar panel in the rural area is commercially viable. The price or tariff
of solar energy to the consumer could be reduced with proper governmental policy
for solar energy usage in the rural area. In places like Thailand, the government in
conjunction with the eight plans of National Economics Development and
Supporting (1999) have laid down the plan to support solar energy usages. There are
so many reasons why we are yet to have such policy in Nigeria. Some of the reasons
are outlined below
13

i.

Governmental support is not enough. There has been only a little budget to
support some project, like the water project in Edo Urban water board.

ii

There is not enough information and knowledge about solar cell. People do
not have enough knowledge about solar cell. They do not seem to know
how useful it is and what are the advantages of using solar cell.

iii

Tax is too high. Providers have to pay 10% of import tax and 5% vat

iv

Energy policy plan does not focus on solar energy. That is why many people
do not know about the use of solar cells. They are still stressing on limited
energy resources such as coal, oil and gas etc.

v.

Because solar cell is dependent on the weather condition, this kind of

energy is not so much reliable. So it may not be used as a major power
source.

Recommendations
With financial support from government and private and sector, I strongly
recommend the installation of solar panel in the rural areas and in some schools
where it can be applicable. Because of its numbers advantages. Among others, the
following are enumerated to back up my claims:
i. The necessities of solar energy sunrays are readily available.
ii. Alternative and renewable energy sources will provide economic benefits such as
averting the threat of future fuel price increase as well as a reliability of supply.
iii. Promoting the use of renewable energy will reduce the regions dependence on
imported and non-renewable energy source.
14

iv. The monetary savings of installing PV cells could be seen as secondary compared
with other non-renewable source of energy, this is because, over the course of its
operation, a 24kw/hr solar system could decrease the burden on the environment
by 70tons of carbon dioxide, 810lb of Sulphur oxide, and 210lb of Nitrogen oxide
generated by conventional power plants. These are internationally approved.
In future solar cell will be used more than today due to the need of energy and
environmental conservation that perform more roles in energy consumption. In
addition, there are going to be many policies tending to supply more use of solar
energy. Therefore, if government or private sector like Shell Company will give
more data and information about solar cell to people it is hoped that it will make
solar cell and its use popular. I hope that soon we can use our solar power as our
main national economical power resource for improving our sustainable quality of
life in the future

15

REFERENCES
Anderson, Bruce, ed. (1991) The Fuel Savers: A Kit of Solar Ideas for Your Home,
Apartment, or Business. 2nd ed. Morning Sun. Still a popular volume.
Hall J. N (1998) Competition in Project development planning Cost Reduction in Off
Shore Engineering. Thomas Telford, London. pp13-22
Isoltech Solar, Reliability of Solar Modiles Http://www.isoltech.solar.html.
J. C Nwachukwu (1999) Introduction to Engineering Economics and Administration,
Human Resource, Time and Money. pp398-408
Lazarus, M. (1999) Evaluation of Benchmarking as an Approach for Establishing
Clean Development Mechanism Baselines. Baston, Stratus

Consulting.

Pp191-202.
Peacock, W. S and White I. L (1992) Site Investigation and Risk Analysis. Proc.
Institution of Civil of Engineers. pp74-81.
Perri J. G, (1992) Engineering Construction Risks-A Guide to Project Risk
Analysis and Risk Management. London, Thoson Telford Press.
Thompson P. A & Willmer G. Caspar (1985) A programme for Engineer Project
Appraisal and Management. Proceedings of the Second International
Conference on Civil & Srtructural Engineering Computing, London, Vol. I pp
75-81.
Wassner, C. (1999) Putting PV to the Test. Abardein, Popular Science pp33
Wayant, J. P. & Hill (1999) Introduction and Overview the Cost of the Kyoto
Protocol: A Multi-Model Evaluation. Special Issues of the Energy Journal. pp
(vii-xiv)
William Chery R. (1973) Harnessing Solar Energy: The Potentials Astronautics &
Aeronautics pp30-36
Winler, H. Spelding, Fecher, R. Tyani, L. and Matibe, (2000) Cost_Benefit analysis
of energy efficiency in low cost housing. Energy & Development
Research centre, University of Cape Town.pp40-100.

16

APPENDIX A
ROOF TOP STRUCTURAL ARRANGEMENTS

APPENDIX B
SOLAR PANEL BRANDS AND THEIR REGULAR PRICE
Mitsubishi PV-MF120EC4
120 Solar Electric Panel
With Junction Box
12 Volt solar panel, 120
Watt with junction box
Regular price: $865.00

Sharp 165 Watt

Solar Electric
Panel
Sharp 165 Watt
Solar Electric
Panel
$771.00

Sharp Solar 216

Watt Solar Electric
Panel
216 Watt for Grid Tie
Systems
$1,088.00

Mitsubishi 180 Watt

PV Panel, Black Frame
Black Frame Model
Regular price:
$1,272.00

Mitsubishi 125 Watt, 12 Volt

Solar Electric Panel
Mitsubishi 125 Watt, 12 Volt
Solar Panel (Black Frame)
Regular price: $821.00

SolarWorld 175
Watt
Monocrystalline
Solar Panel
SolarWorld 175 Watt
Monocrystalline Solar
Panel
$865.00,
8/$6,800.00

Evergreen 195 Watt

Solar Electric Panel
Zero percent tolerance
$905.00, 4/$3,560.00

Sanyo 200
Watt HIT Solar
Panel
High Efficiency
Solar Panel
Regular price:
$1,575.00

BP Solar 200 Watt

Solar Panel
BP Solar 200 watt
solar panel
Regular price:
$1,195.00

Evergreen Solar ES190 190 Watt Solar

Panel
Evergreen 190 watt solar
panel
Regular price: $963.00

Kyocera
KD135GX-LP 135
Watt 12 Volt Solar
Electric Panel
Kyocera 135 Watt
12 Volt
Regular price:
$875.00

18

APPENDIX C
Solar Electricity
Stand-alone Solar electricity or solar home system (SHS)
Stand-alone solar electricity systems or solar home systems (SHS) are used when no electricity grid
is available. A battery is needed to ensure the availability of electricity at night or at periods with
little bright sunlight. Solar home systems are often used to cover the electricity needs of a
household. Small systems (Commercially available as a SHS kit) cover the most basic needs
(lighting and sometimes TV or radio), larger systems can also power a water pump, wireless phone,
refrigerator, electric tools (drill, sewing machine, etc) and a VCR. The system consists of a solar
panel, a control unit, battery storage, cable, the electric load and a support structure.

1. Solar panel
3. Battery
2. Controller
4. Appliances
Configuration of a solar Home System
MySolar.com has a simple tool that can be used for system sizing: the calculation of the number of
solar panels and batteries. Although a handy person can do much of the work, all electric
connections should be made by a trained professional/installer (check with your utility or supplier).

http/www.mysolar.com/mysolar/pv/techshs.asp

3/29/2008

19