| dc.description.abstract | This thesis evaluates the impact of Renewable Energy Certificates (RECs) on the financial viability of a hypothetical medium-scale 1 MWp rooftop solar photovoltaic (PV) project in Kumasi, Ghana. The objective is to analyse how RECs impact key financial metrics such as Net Present Value (NPV), Internal Rate of Return (IRR), and payback period, and to provide strategic insights into managing renewable energy investments under varying economic conditions. Using SolarGis for energy yield simulations and Microsoft Excel for financial modelling, this study creates two situations: one without the inclusion of REC income and one with REC income. The financial performance of these situations is compared to assess the potential improvement in profitability provided by RECs. A sensitivity and scenario analysis is then conducted to further explore the resilience of the project’s financial metrics against fluctuations in key variables such as REC prices and their contract durations, discount rates, and electricity tariffs. Employing Real Options Theory, the research offers qualitative strategic decision-making insights for potential investors based on the modelled financial outcomes.
The findings indicate that incorporating RECs significantly improves the project's NPV and IRR, suggesting that RECs can be a critical factor in promoting the economic success of solar energy projects in emerging markets like Ghana. The study also highlights the need for robust policy frameworks to support the integration of renewable energy incentives such as RECs, which could lead to increased adoption of renewable technologies in Ghana and similar regions where renewable energy development is still emerging. | |