Financial Viability and Environmental Benefits of Solar Photovoltaic System in Rural Bangladesh

Md. Islam; Sayan Chakrabarty; Redwan Ahmed

Financial Viability and Environmental Benefits of Solar Photovoltaic System in Rural Bangladesh

Md. Tawhidul Islam §

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Sayan Chakrabarty ‡

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Redwan Ahmed ¶

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§ Pabna University of Science and Technology

‡ Department of Economics, Shahjalal University of Sci...

¶ Department of Economics, Pabna University of Science...

Financial Viability and Environmental Benefits of Solar Photovoltaic System in Rural Bangladesh

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Abstract

In Bangladesh major group of population (73% of total population) live in rural areas. Without changing their living status Millennium Development Goals (MDG) will not be achieved and to do so it is necessary to ensure the use of electricity in those areas. The concern of this paper is about the role of rural electrification with the help of Solar Photovoltaic (PV) System, in respect of its financial viability and environmental benefits. Relevant information has been collected from 4 households and 2 microenterprises that make use of Solar PV System in various purposes from a village and a rural market-place nearby the village of Sunamganj district in Bangladesh. Use of the Solar PV System, both in microenterprises and other income generating purposes, alongside regular household usage, indicate relatively higher level of financial viability in favor of this investment. However, substitution of the use of only little quantity of kerosene by a Solar PV System indicates relatively lower level of financial viability against the investment. In this paper the term ÃƒÆ’Ã†’Ã‚¢ÃƒÆ’Ã‚¢Ãƒ¢Ã¢â€š¬Ã…¡Ã‚¬-financial viability’ has been used to mean high levels of Net Present Value (NPV) and Internal Rate of Return (IRR) and low level of Pay Back Period (PBP). At 6 percent discount rate all the cases reveal that the investment (to buy a solar panel) is financially viable. However two cases out of six cases (1st and 2nd cases) show negative NPV at 9 and 12 percent discount rate without considering the environmental benefit and the quality and safety of the solar lamps.

References

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

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Not applicable for this article.

How to Cite This Article

Md. Tawhidul Islam, Sayan Chakrabarty, Redwan Ahmed. . "Financial Viability and Environmental Benefits of Solar Photovoltaic System in Rural Bangladesh". Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 13 (GJMBR Volume 13 Issue 29 (C10)).

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GJMBR Volume 13 Issue 29 (C10)

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

financial viability internal rate of return (IRR)microenterprise Net present value (NPV)photovoltaic (PV) system solar home system (SHS)

Classification

GJMBR-C Classification JEL Code: F64

F65

Submission ReceivedDecember 16, 2012
Peer Review Double Blind
Handling Editor
Accepted January 4, 2013
Published August 26, 2013

Version of record

v1.2

Issue date

August 26, 2013

Language

English

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Article Matrices

Total Score: 103

Country: Bangladesh

Subject: Global Journal of Management and Business Research - C: Finance

Authors: Md. Tawhidul Islam, Sayan Chakrabarty, Redwan Ahmed (PhD/Dr. count: 0)

View Count (all-time): 298

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Publish Date: 2013 08, Mon

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