feasibility study for installation of solar panels in a

University of Calgary

PRISM: University of Calgary's Digital Repository

Graduate Studies Graduate Capstones

2018

Feasibility study for installation of solar panels in a

school in Zacatecas Mexico

Ghajari, Zeinab

Ghajari, Z. (2018). Feasibility study for installation of solar panels in a school in Zacatecas Mexico

(Unpublished report). University of Calgary, Calgary, AB. doi:10.11575/PRISM/33096

http://hdl.handle.net/1880/108744

report

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UNIVERSITY OF CALGARY

Feasibility study for installation of solar panels in a school in Zacatecas, Mexico

by

Zeinab Ghajari

A RESEARCH PROJECT SUBMITTED

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE

DEGREE OF MASTER OF SCIENCE

GRADUATE PROGRAM IN SUSTAINABLE ENERGY DEVELOPMENT

CALGARY, ALBERTA

AUGUST, 2018

© Zeinab Ghajari 2018

ii

Abstract

This project investigates the relevance and effectiveness of solar energy as a sustainable

and cost-effective solution for providing electricity to the education sector in developing

economies. We assess the feasibility of powering a school in Mexico with solar energy and study

the economic, social, and environmental costs and benefits. The analysis has been done with

RETScreen software and has been checked manually. The internal rate of return (IRR), net

present value (NPV), and pay back periods coming from our financial calculations show that the

project is economically feasible.

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Table of Contents

Approval Page .................................................................................................................. i

Abstract ........................................................................................................................... ii

Table of Contents ........................................................................................................... iii

List of Tables ................................................................................................................. vi

List of Figures ............................................................................................................... vii

List of Symbols, Abbreviations and Nomenclature ....................................................... viii

Chapter 1. Introduction .................................................................................................... 1

1.1 Research Question ........................................................................................... 1

1.2 Interdisciplinary aspects ......................................................................................... 2

Chapter 2. Literature Review ........................................................................................... 4

2.1 Importance of renewable energy............................................................................. 4

2.2 Economic impact of using renewable energies ....................................................... 4

2.3 Various solar technologies and their relative cost structure ..................................... 6

2.3.1 PV vs other technologies ................................................................................. 6

2.3.2 Different types of solar PV panels.................................................................... 7

2.3.3 How does a solar PV panel work? .................................................................... 8

2.3.4 The economic feasibility ................................................................................ 11

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2.4 Social & environmental impact of using renewable energies ................................ 12

2.5 Solar energy in Mexico ........................................................................................ 15

Chapter 3. The projects’ impact on three dimensions of sustainability ........................... 19

3.1 Method for measuring economic and environmental impact ................................. 19

3.1.1 Assumptions .................................................................................................. 20

3.2 Economic evaluation ............................................................................................ 23

3.2.1 Cost benefit analysis ...................................................................................... 23

3.2.2 Possible scenarios for handling the project’s cost ........................................... 27

3.2.3 Fundraising .................................................................................................... 28

3.3 Environmental Impacts ........................................................................................ 30

3.4 Social impacts ...................................................................................................... 31

3.4.1 Social benefits and activities .......................................................................... 31

3.4.2 Method for measuring social impact .............................................................. 32

Chapter 4. Limitations, Further Research and Conclusion .............................................. 34

4.1 Limitations and Further Research ......................................................................... 34

4.2. Conclusion .......................................................................................................... 34

References ..................................................................................................................... 36

Appendix A. Business Model Canvas ............................................................................ 42

Appendix B. RETScreen calculations ............................................................................ 43

v

Appendix C. The school’s electricity bill ....................................................................... 65

vi

List of Tables

Table 1. Results ………………………………………………………………………………… 24

Table 2. Total estimated costs …...……………………………………………………………… 26

vii

List of Figures

Figure 1. Solar photovoltaic system …………………………………………………. 10

Figure 2. PV Levelized cost of energy benchmark summary (inflation adjusted) 2010-

2017................…………………………………………………………………………... 12

Figure 3. Solar radiation rate in Mexico ………………………………………………...16

Figure 4. Monthly total of sun hours ……………………………………………………16

Figure 5. Mexico Distributed PV demand 2015-2022 ……………………………….….17

Figure 6. Solar radiation in different month in the project location………………….…. 22

Figure 7. Electricity consumption vs solar generation for the school……………...….…23

Figure 8. GHG emission reduction causing by the project ……………………………...30

viii

List of Symbols, Abbreviations and Nomenclature

AC Alternating Current

CFE Federal Electricity Commission

CPV Concentrated Photovoltaic

CSP Concentrated Solar Panels

CSR Corporate Social Responsibilities

DC Direct Current

DSSC Dye Sensitized Solar Cell

GDP Gross Domestic Product

GHG Green House Gas

IRR Internal Rate of Return

ITC Investment Tax Credit

LCOE Levelized Cost of Electricity

MC-Si Multi-crystalline Silicon

Mono-Si Monocrystalline Silicon

NPV Net Present Value

P-Si Polycrystalline Silicon

PV Photovoltaic Solar Panels

TFSC Thin-film solar cells

STE Solar Thermoelectricity

USD United State Dollar

1

Chapter 1. Introduction

1.1 Research Question

Use of renewable energy sources comes with a variety of benefits including reducing

costs, creating jobs, dispersing less pollution, and independence from fossil fuels making the

economy more secure. With the ever-decreasing cost of solar energy as a viable source of

renewable energy, expectations from solar energy are rising and more applications for it are

proposed. The use of distributed solar energy sources that are also connected to the grid is one of

these applications that is considered potent in helping increase affordable access to electricity. As

a step in understanding this potential, this project seeks to address the question of whether solar

energy can be counted on as a sustainable source of energy for the low-income sector in

Mexico as well as other developing countries? To answer this question, an experiment will be

done by determining the feasibility of installing solar panels in a school located in Panfilo Natera

municipality in Zacatecas, a state in north central Mexico.

Mexico is chosen as the study location because experts rank Mexico’s solar resources and

sunshine among the best in the world. Also, the Mexican government has introduced

infrastructure and legislation that supports investment in solar energy in various forms including

allowing the renewable electricity to be sold into the grid (Leinweber, 2017). Zacatecas is a

major name in the resource industry especially known for its silver mining industry and reserves.

The state is receptive to renewable projects and has commissioned a 130MW wind farm recently.

The school’s name is Narciso Mendoza and it houses 4 classrooms with the total dimension of 10

m wide and 23 m length. Appendix A provides a summary overview of our plan’s business

model.

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1.2 Interdisciplinary aspects

This reports cover different aspects of the impact of such projects on the triple bottom

line of sustainability including the economic, environmental and social impacts.

On the economic side, this report will provide a feasibility study of the plan, evaluate its

financial, environmental, and social costs and benefits, and help to determine how to raise the

needed funds for its successful completion. The project is expected to reduce the school’s

electricity cost. These costs are currently subsidized by the government and lowering them

allows the government to spend the saved money on other aspects of education. The report

provides different scenarios for costs and revenue and provide and estimation of the economic

benefits of the project.

The project will also reduce the school’s environmental footprint by replacing electricity

that is generated from fossil fuels with a clean renewable energy with minimal environmental

damage. The full extent of this effect is discussed and calculated as part of this study.

From the social perspective, this project will create a living laboratory for the children to

learn about sustainability and solar energy. They will be familiarized with the technology, do

little experiments with solar energy, and become more environmentally aware. The learning will

also extend to the broader community, initiate conversations and create a culture of

sustainability. In this study, we propose workshops and trainings to move this agenda forward

and introduce and discuss the instruments to measure this social impact.

In this study, we evaluate and measure the above impacts and benefits. The findings can

be used to determine the relevance, effectiveness, and scalability of this approach for expansion

to additional sites and helping children to study in powered schools in other places without any

3

access to electricity. The project has been defined by Nature’s Ride, a non-profit organization 1

in Calgary Alberta.

1http://www.electrifica.com.mx/

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Chapter 2. Literature Review

2.1 Importance of renewable energy

Due to global warming and the damaging impact of fossil fuel sources of energies on the

environment, replacing fossil fuels with renewable sources is a priority of the environmental

efforts around the world. Not only are fossil fuels pollutants and produce large amounts of

greenhouse gas (GHG) emissions but they also gradually become too expensive to extract and

are finite resources, which will eventually deplete. On the contrary, renewable energies such as

wind and solar will replenish continuously and will never run out (Types of Renewable Energy,

2018). These concerns have forced the global community to pay as much attention as it can to

renewable and clean sources of energy through introducing regulations, policies, subsidies and

developing a sustainability culture to change people’s behavior. Of course, renewable energies

come with their own shortcomings. The most important of which include a) intermittent

availability and weather dependency of sunlight and wind which reduces the capacity factor for

these energies; b) the need for a storage system such as batteries to accompany such systems to

help mitigate the weather dependence problem and; and c) lower efficiency or renewable

technologies in comparison to the existing technologies. However, the hope is with the

advancement of technology and adjustments in consumption behavior, these concerns will be

gradually mitigated.

2.2 Economic impact of using renewable energies

Based on the Paris agreement, the global share of renewable energies will double from its

2010 levels to around 36% renewable by 2030. This energy transition is more for electrification,

transport, and heating. The increase in the renewables is predicted to have a 0.6% to 1.1%

5

positive impact on gross domestic product (GDP) of developed and developing countries

including Mexico (Ferroukhi, 2016).

One of the key elements of this transition is large investment in solar energy and the

resulting substantial reduction of fossil fuel imports which is an especially valuable opportunity

for developing countries. Solar energy is expected to reduce the overall electricity costs. More

importantly, it helps to keep the environment safer and cleaner. Applications of this source of

energy are wide and have been extended to residential and commercial buildings, cars, and small

equipment such as portable power sources, etc.

The higher the electricity rates, the stronger is the business case for the use of solar

energy in the grid. That is why solar energy currently has more installations in the developed

countries and places such as New Mexico, California and Hawaii, with the high price of grid

electricity and relatively low levelized cost of electricity (LCOE) for solar (Rhodes, 2016).

However, since the solar energy prices are predicted to keep dropping, more and more

markets will provide opportunities for this source of energy. For instance, when the price per

kWh falls below 10 cents, the solar energy will be a strong competitor in the U.S market.

Interestingly, also as the solar energy becomes more widespread, the economics of scale kick in

making it even cheaper.

The above does not mean that there is not a case for the use of solar energy in the

developing countries with lower energy prices. Stand-alone modules which are offline and can

power a house, building, or a piece of equipment are common in these countries as the grid may

not reach all areas. It would make more economic sense to power up remote areas through these

standalone modules rather than expanding the grid especially if the country is geographically

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located in an area with abundant sunlight. There is a trend where solar energy is used to help

provide education, water supply, and health access in remote areas of countries such as Kenya,

Indonesia, and the Philippines. This energy can also be counted as a source of income for the

host school or businesses in these areas. They can sell the excess energy to the grid or local

customers and generate revenue or use the energy to run a small business such as an internet

Café. They may even sell the carbon credit earned from the reduction emission and as additional

source of revenue. This, while considered an economic benefit, also has an empowering impact

which improves welfare.

One important note about this however is that despite the trend and the economic case for

such projects, the high upfront cost of solar systems, and the relative poverty of the target areas

has made the majority of such ventures dependent on financial aids from home or foreign

governments or microfinance programs. Fortunately, though, there is increasing attention from

aid agencies to this area.

2.3 Various solar technologies and their relative cost structure

2.3.1 PV vs other technologies

Between the different technologies including solar thermoelectricity (STE), dye

sensitized solar cell (DSSC), concentrated photovoltaic (CPV), photovoltaic solar panels (PV)

and concentrated solar panels (CSP), PVs and CSPs are the more mature technologies and

dominant sources of solar energy in the world. These technologies are expected to have a rapid

growth in the future providing respectively 10.5 and 9.6 percent of the global electricity

generation by 2050 (Chu, 2011). The efficiency of commercialized PV panels which is the

selected technology for our project is about 10-15% and expected to increase to 25%. The

lifetime of such systems is expected to be around 25 years and the energy payback time is

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currently approximately 2 years which is anticipated to reduce to 6 months in the future as mass

production and technology breakthroughs reduce the cost of c-silicon, the base row material for

PV production (Chu, 2011). Although there are some advantages with CSPs, such as higher life

time and lower payback period time, in some cases and regions PVs are preferred. That is

because they require lower capital investment and maintenance costs as well as simpler

processes for construction including lower land requirements, no need for the land to be flat,

building in shorter time, and being more suitable for off-grid applications as a result of not

having moving parts.

2.3.2 Different types of solar PV panels

Almost 90% of photovoltaic panels in the world are silicon based. Different grades of

silicon with different purities (i.e. level of alignment of silicon molecules) are used in the panels.

Enhanced silicon purity increases the efficiency and subsequently the price of the solar panel.

The three major types of PV panels include monocrystalline silicon (Mono-Si), polycrystalline

silicon (P-Si), and thin-film solar cells (TFSC).

Mono-Si solar panels are recognised with a diamond shaped mark in between the cells.

They are made out of the finest-grade silicon and are the highest purity silicon panels with the

efficiency of 5-20%. Mono-Si are space efficient as well and need less space compared to other

types of PVs. They are long-lasting and have 25 years expected life and warranty. In low light

conditions they perform better compared with the P-Si solar panels. These panels tend to be more

efficient in warm weather. Performance does suffer as temperature goes up, but less so than P-Si

solar panels. One problem with these panels is that if the part of the panel is covered (e.g., with

shade, dirt or snow) the entire circuit can break down and no energy is produced (Maehlum,

2018).

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Polycrystalline silicon (P-Si) or multi-crystalline silicon (MC-Si) solar cells were the first

solar panels built. The process for making P-Si PVs is simpler and hence the cost and price is

lower. But they have a lower efficiency (13-16%) and heat tolerance compared to Mono-Si. This

means that in high temperature their performance is lower than Mono-Si. However, this is not a

significant issue for small scale of usage. They also have a lower space efficiency compared with

Mono-Si panels (Maehlum, 2018).

Thin-film solar cells (TFSC) have an efficiency between 7-13% depending the

technology. The technology is expected to have a jump in efficiency in the future (to 10-16%).

They have a lower price compared with the other models and high temperatures and shading

have less impact on their performance. They are not recommended for most residential

applications because they take lots of space. Along with lower space efficiency, the cost of

additional equipment like support structures and cables needed for installation of PV equipment

will increase which overall makes these panels an expensive choice. Further they have shorter

lives and come with shorter warranties (Maehlum, 2018).

Based on the above, both Mono-Si and P-Si solar panels are good choices with some

viable advantages. Nevertheless, we decided to proceed with the P-Si solar panels for this

project. They meet our needs, are affordable, and are common for projects like ours.

2.3.3 How does a solar PV panel work?

A solar PV panel is a system which generates electricity in the presence of sunlight.

There exist three types of PV systems regarding their relationship with the power grid including

off-grid, tie-grid and hybrid. In the off-grid system there is no connection between the solar

system and the grid and the produced power is consumed directly or stored in batteries. In the

tie-grid system the generated power goes to the electrical grid directly and the account gets credit

9

for it (the credit could be in different forms), but you draw from the grid whenever your

consumption exceeds the system’s generation. The hybrid system is a combination of the above

in that it is both connected to the grid and includes batteries. Inverters and solar panels are the

most essential element in all of the systems. The main elements of a solar PV system are listed

below (Kayaer, 2011):

1. Solar PV Modules or panels: the most noticeable and essential elements of any solar system

are the panels. In these panels light (i.e. photo) converts to electrical power (voltage, they are

called photo voltaic modules). The panels are made from either 60 or 72 cells and produce

direct current (DC) electricity. The 72 cell types have an additional row for cells which

makes them larger in size (12” taller) causing a higher power output albeit with the same

efficiency as the 60 cell panels. However, the larger capacity gives them some advantage in

bringing the installation cost in larger capacity projects lower. Often, the color of 60 cell

panels is black and the 72 cell panels are silver.

For residential projects with steep roofs, the 72 cells may be hard to work with but for flat

roofs they are fine. Depending on the dimensions of the roofs, the 72 cell panels may be

chosen if fitted well. Nevertheless, for residential purposes the 60 cell types are more

common, and 72 cells types are mostly reserved for commercial, ground mounted, and utility

size projects (Jonathan, 2016) & (Beiler, 2015).

2. Inverters: the role of inverters is to convert the DC generated electricity to alternating current

(AC) form which is the type that is used in most appliances. The inverter also ensures that

solar power generated is used at priority over grid supply. The efficiency of inventors varies

from 90% to 95%.

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3. Batteries: they are used to store the extra energy for when the sun is not available or for the

peak hours. For grid-ties and hybrid systems, batteries are optional.

4. Distributor: it’s a device which distributes the AC power to the grid or to the homes or other

places. The output from the inverter is fed to a dedicated breaker in your house's electric

panel, and then through to your home. If you are creating more power then you are using,

then some of the power flows backwards and into the grid, and you receive a credit from

your utilities company (Solarnation, 2018).

5. Mounting structures: they are used to hold the panels in place and to make sure the panels are

exposed to the maximum sunlight. They are made of galvanised iron or aluminium.

6. Electrical and safety equipment: they are important to make sure the safety of the system is

met.

Figure 1. Solar photovoltaic system

Adapted from: (Solar FAQs, 2018)

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2.3.4 The economic feasibility

As mentioned in the previous section, the cost of producing power from solar

photovoltaic panels compared to the grid electricity (i.e., Grid parity2) is the ultimate factor in

determining the economic feasibility of solar energy projects.

As an example, currently, the average Levelized Cost of Electricity (LCOE) from solar

panels in New York is from 7 to 17 cents per kilowatt-hour (cent/kWh), depending on the utility

scale and commercial or residential nature of the project. The Investment Tax credit (ITC) is a

federal policy in the U.S to support solar project, which results in a credit against the investor’s

taxes. As it is shown in Figure 1, ITC currently play a significant role in price reduction by

reducing the out of pocket rate for the consumers to between 3 to 11 cents. Hence, in New York,

in presence of (and even without considering) the ITC there is not a huge difference in price

between the electricity produced from PV panels and that bought from the grid which costs

around 9-13 cent/kWh (U.S. Energy Information Administration, 2018). The price of PV power

varies from place to place depending on the size of the installation and the amount of sun light in

that place. Note that for the LCOE data to be relevant, it should not only take into account the

cost for buying, installing, financing and maintaining the system over its life time, but also the

geographic differences, regional differences in various costs, and the cost of environmental

impacts such as carbon emission. Specifically, the labour cost is a significant factor that could

bring the costs much lower in developing countries compared to the developed ones.

2 Grid parity is when an alternative form of energy generates power at a levelized cost of electricity that's equal to or less than the price of buying power from the electric grid.

12

Figure 2 shows the decreasing cost of solar energy in sample US regions during past

years (with and without ITC), also the anticipated target price in future (Fu, Feldman, &

Margolis, 2017).

Adapted from: (Fu, Feldman, & Margolis, 2017)

2.4 Social & environmental impact of using renewable energies

One of the social impacts of increasing renewable energies is helping grow welfare in the

world. The predicted doubling of the share of renewable energy by 2030 and the resulting growth

in GDP will improve the world welfare so that for a 0.6% to 1.1% growth in GDP, welfare will

increase from 2.7% to 3.7% (Ferroukhi, 2016). This will show in wealth, education, health, and

also positive environmental impacts such as reducing GHGs emissions and material

consumption.

Figure 2. PV Levelized cost of energy benchmark summary (inflation adjusted) 2010-2017

13

Another socio-economic impact of this transition would be creation of more jobs and

poverty reduction. The data from 2014 shows that the direct and indirect jobs in the renewable

energy sector total around 7.7 million which is increased 18% compared to the previous years. It

is anticipated that this number will reach 24.4 million by 2030 (Ferroukhi, 2016). Also, these

jobs will be more stable in comparison to those based on the oil economy as solar energy is

susceptible to fewer economic and political risks than fossil fuel energy. One of the largest

sectors among renewables is solar PV which has created 2.5 million jobs globally in 2014.

(Ferroukhi, 2016).

More important than all, solar energy significantly reduces GHG emissions in

comparison to fossil fuel generated energy. In fact, the emissions from a solar energy – aside

from the minimal emission associated with manufacturing and disposal of the equipment – is

zero for the operating period.

In the worst case scenario, the emissions from the lifecycle (from manufacturing to

disposal) of the solar equipment reach 11 percent of the alternative of using fossil fuels. For

many specific pollutants, this number is well below 1 percent (Fthenakis, Kim, & Alsema, 2008).

Therefore, solar energy helps in fighting the climate change and global warming and reduces

pollution and its associated problems.

Solar energy can be used in two forms of active (solar PV panels) and passive (by green

building design). Although, beyond the scope of this project, it should be noted that passive use

of solar energy is as important for making the world more sustainable as the active usage.

Passive design relies on the use of a specific structure and material to capture more sun energy

and provide heat, energy and light. The benefit of passive use of solar energy includes the

positive impacts on the human mental system, increasing functionality, and helping people

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absorb more vitamin D which all are more important for children. Foroudastan (2006) reports in

his comparative study of different schools that sun light increases student performance by about

14%. This suggests passive design for use of solar energy in schools to be an attractive future

project. In a school setting, renewable electricity generation also provides an opportunity for

creation of a sustainability learning lab which helps educate the students at the same time as

providing energy (University of Calgary, 2016).

Finally, solar energy is a distributed energy; that can be installed in small capacities in

remote areas. This contrasts with grid generated electricity which needs huge investments to be

transferred to remote areas. Therefore, solar energy removes the investment barrier and enables

many people in remote undeveloped areas to gain access to electricity for the first time. In turn,

this leads to better education, health, and social services to these areas.

With the huge and ever increasing population of earth and its limited resources,

sustainability is not just an option with bonus benefits. Rather it is required for continuous and

prosperous life of human kind. All the advantages of renewables such as solar energy can only

help us minimize our impact on the environment which is our responsibility in the first place.

Countless NGOs, governments, and charities are putting their effort in creating awareness and

raising the funds needed for developing solar and sustainable energies especially in developing

countries. Nevertheless, the efforts are less than the needs and every additional step and project

is needed. Luckily, with the rapidly decreasing cost of solar energy and the minimal maintenance

and ongoing costs for solar projects, investments and contributions to solar initiatives is

becoming easier and paying for itself in many instances.

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2.5 Solar energy in Mexico

As a developing country, Mexico’s GHG emissions have been consistently increasing

since 1990. However, the source of emissions has gradually shifted from agricultural and

resource development sources to manufacturing and energy related ones. So that energy related

emissions accounted for more than 60% of all emissions in Mexico as of 2013 (US AID, 2017).

As per the Paris agreements, Mexico has set targets to bring its emission levels 25% lower than

what they would be without any plans by 2030. Many consider Mexico’s target to be less than

sufficient as it is inconsistent with the global goal of keeping the world emission level below 2C

degrees (Kuramochi, 2017). This means that there is potential for more aggressive and ambitious

plans and policies. The country also plans to procure at least 50% of its energy needs from

renewable sources by that time (Nieto, 2014)

Mexico follows its climate change policy based on the high-level General Law on

Climate Change. There are several policies and regulations such as introduction of a carbon tax

and an emission trading scheme defined under this target. One such policy introduced in 2015, is

the “Energy Transition Law” which mandates the country to generate 35% of its energy from

renewable sources by 2024.

Among the different renewable sources, solar energy is a very attractive solution for

Mexico. Latin America in general is one of the fastest-growing locations for the solar market.

Within the region, Mexico has the largest potential because of having very strong sunshine

compared with its neighbours. This difference has been shown in Figure 3 (Marcacci, 2015).

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Figure 3. Solar radiation rate in Mexico

Adapted from: (Oseguera, 2010)

Figure 4 shows the amount of sunshine in the target location for this project; Zacatecas,

Mexico.

Figure 4. Monthly total of sun hours

Adapted from: (Climate in Zacatecas, 2018)

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Besides abundant sunshine in this country, the labor cost is very low and hence the

country is anticipated to generate very cheap solar power costing as low as 1.77 cent/kWh. A

number that will further decrease in the future as the technology and infrastructure matures

(Beach, 2017). It is expected that Mexico becomes one of Latin America’s leading markets for

distributed solar energy soon. It is anticipated that Mexico will have 11% of global PV demand

with the lowest cost by 2022. Figure 5 shows the demand in Mexico for distributed PV system

from 2015 to 2022 (Deign, Mexico’s Record Solar Prices Fall Below the Average Cost of

Energy From Gas and Coal, 2018).

Figure 5. Mexico Distributed PV demand 2015-2022

Adapted from: (Deign, 2018)

In 2017 Mexico released a Development Program of the National Electric System which

outlines a plan to spend $107 billion US in the sector with the majority spent on clean energy

18

especially wind and solar. As part of these reforms and initiatives, Mexico’s electricity grid has

opened to private sector and independent generators. Therefore, customers can now produce

enough energy (below 0.5 MW) for their own use without the need to obtain a permit and can

sell the excess of this generation to the state for a regulated price or sell it to other companies at

market price. Another option is net metering where excess solar energy can be credited towards

future consumption. This, along with the plan to improve the grid and transmission infrastructure

has opened the prospect of up to 20GW of distributed generation for the country by 2030

(Critchley, 2017).

As a result of all this, sales of sub-20 kW residential solar systems are already soaring

and the financial institutions are starting to offer loans that cover the estimated 3-7 years period

for the payback of the investment. The commercial-scale systems of less than 1 MW can also be

an attractive segment. Nevertheless, the market growth in this segment has not been as great so

far (Deign, 2017).

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Chapter 3. The projects’ impact on three dimensions of sustainability

This project investigates the three dimensions of financial, environmental, and social

costs and benefits of installing solar panels on the roof of a school in Zacatecas, Mexico. The

proposed system will be connected and sell the excess production back to the grid. This project

helps in answering the broader research question of whether solar energy can be counted on as a

sustainable source of energy for the low-income sector in Mexico and hopefully other

developing countries.

3.1 Method for measuring economic and environmental impact

For an accurate assessment of the energy generated and its various impacts, we need to

take into account the geographical location, duration and intensity of sunlight, radiation angle,

and the selected PV modules, and find the cost of the produced energy per kWh. As a starting

point we evaluate how much solar energy we need for the school and subsequently find the

technical specifications of the system. We used the school’s electricity bill (Appendix C) by the

Federal Electricity Commission (CFE) from 6 September 2016 to 6 September 2017 to estimate

this. According to the bills, the total electricity used by the school throughout the year equals to

6352 kWh.

We have calculated the hardware specification and the relevant cash flow using two

different methods: The RETScreen software as well as manual calculation. We used data

20

provided by our vendor company (Mexican Electrifica solar company)3 for estimation of some of

the basic assumptions (e.g., cost of solar panels).

3.1.1 Assumptions

Below is the list of assumptions and input to the software

• Angle: is one of the important parameter in performance of the system and refers to the angle

that the solar panel should be tilted to face the sun so that it can produce the most energy.

This angle depends on the latitude of the location and will change during the year depending

on the season. Depending on one’s need the angle may be optimized for the winter or

summer or the whole year. Another related and even more important factor here is the

direction of panels. The best and optimum case is when the panels face south. For this project

based on our research we use 20 degrees tilt and direct the panels towards south.

(http://solarpanelsphotovoltaic.net/find-best-solar-panel-angle-tilt-angle/) which is the year

round optimum amount for Zacatecas. This angle is also the recommended number by our

vendor (Solar Electricity Handbook , 2017; What's the best angle for my solar panels?,

2018).

• Solar tracking mode: fixed – This means that the panel will not be changing angle to follow

the sun. The technically optimal solution is to install a tracker that will change the angle as

the sun moves but the cost of such system is currently so expensive (around $6,000 US)

(Beaudet, 2015) that could make most solar projects unfeasible.

3 http://www.electrifica.com.mx/

21

• Panels Model: Poli-Si-CS6X-300P: After evaluating different types of PV we concluded that

both mono crystallin silicon and poly crystallin silicon types are adequate for this project due

to the location and weather condition and school roof situation and size. Based on our vendor

recommendation we selected the panels with 300 W power. We select this type from

Canadian solar company for our RETScreen calculation and did the calculations for poly and

mono crystalline silicon types of this panels (Poli-Si-CS6X-300P) and (Mono-Si-CS6X-

300P). The dimensions of these types are 76.93" x 38.7" x 1.57" per units with 72 solar cells.

The roof area of the school with dimension of 10m * 23 m is more than enough for the

calculated number of units, 13 and 14. Based on our calculations we got the same data in

terms of efficiency, capacity factor and number of units for both mono and poly types.

Finally, we selected poly types since it’s cheaper and based on our consultations with solar

companies it is good enough for our project temperature condition. There is still a possibility

to go with mono panels. However, it is not going to change our analysis much.

• Miscellaneous losses: 5-15%, which is the typical range, to evaluate best and worse

scenarios. This includes losses due to the presence of dirt or snow on the modules or

mismatch and wiring losses.

• Inverter efficiency: 90%

The table below shows the results for different scenarios:

• Panel Efficiency: 15.63 %

• Solar Irradiance has been taken from RETScreen which is calculated based on the selected

location, Zacatecas Mexico. This data is very close to what we found in other websites that

report solar irradiance across the globe. Figure 6 shows the solar irradiation in different

month which are got from RETScreen.

22

Figure 6. Solar radiation in different month in the project location

Adapted from: (RetScreen, 2018)

• Cost per KW of PV panels: Our plan is to find the best vendor available and buy the panels

from that company. One option we are considering is Electrifica Solar Company in Mexico

offering a price equal to $10,500 US, including installation and maintenance cost over 25

years. For the initial cost of the project we need to know the cost per kW of PV panels. Since

the RETScreen data is not updated and the default price there is higher than today’s market

we used the quote from our vendor which is equal to US $2.25 per Watts of installation. We

also add 16% to this to account for the tax rate in Mexico. This price is a little higher

compared to the quotes we got from Canadian companies which are around US$2 per Watts

of installation. But since this project is a small one it does make sense for it to be a little more

expensive. The cash flow in this project stems from the reduction in the electricity bill as the

grid power is replaced with generated power from solar energy. As of July 2018 the price of

electricity is 0.21 USD/kWh based on the school electricity bill.

• Discount rate: The discount rate is the rate at which cash loses value through time and is

usually set based on the return that is available to businesses through safe investments such

23

as treasury bonds. This rate in Mexico for the past 10 years has been between 3 to 10 percent

(Federal Reserve Bank of St. Louis, 2018). As such we consider two scenarios and take the

average rate to be respectively 5% and 8% in them.

• Annual utility rate inflation for the next 25 years: it is assumed to be the same as discount

rate.

In the next step, based on the above assumptions we calculated the produced solar energy

throughout the year and made the environmental and financial calculations.

3.2 Economic evaluation

3.2.1 Cost benefit analysis

Figure 7 can provide a sense of effectiveness of the system in providing the needed

energy. The data in this chart can also help estimate how much extra energy can be sent to the

grid each month.

Figure 7. Electricity consumption vs solar generation for the school

(Ghajari, 2018)

0

200

400

600

800

1000

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Ener

gy (k

Wh)

Month

Electricity Consumption vs. Solar Energy Generation

Consumption (kWh) Solar System Generation (kWh)

24

Table 1 below shows the results under different assumptions. The full results from the

software are included in Appendix B. Calculations using RETScreen and done manually both

yield the same results.

Table 1. Results

Scenario 1 Scenario 2 Scenario 3 Scenario 4

Installed cost per W including tax (USD)

2.61 2.61 2.61 2.61

Installed Capacity (kW) 3.9 4.2 3.9 4.2

Total initial costs (USD) $10,179 $10,962 $10,179 $10,962

Maintenance cost (USD)/year $172 $172 $172 $172

System losses 5% 15% 5% 15%

Energy generation (kWh) 7,000 6,800 7,000 6,800

First year saving and revenue (USD)

$1,473 $1,419 $1,473 $1,419

Discount rate & Electricity export escalation rate

8% 8% 5% 5%

Payback period (years) 5.9 6.5 6.5 7.2

NPV $22,354 $20,229 $22,354 $20,229

IRR 21% 19.3% 17.6% 15.9%

Number of units of panels 13 14 13 14

Capacity Factor 20.5% 18.4% 20.5% 18.4%

(Ghajari, 2018)

As Table 1 shows we have calculated the project financials under four different scenarios.

These scenarios consider the two different discount rates of 5% and 8% as well as miscellaneous

losses of 5% and 15%. We have considered the 5% loss case based on the vendor suggestion as

the best-case scenario and the 15% loss case as the worst case scenario. The first year revenue

25

varies from $1,419 US to $1,473 US under different scenarios and increases annually depending

on the inflation rate (5% to 8%). Under all four scenarios the project has a positive NPV of more

than 20,000 USD and an IRR of more than 16%. The project payback period varies between 5.9

to 7.2 years depending on the assumptions which is a reasonable time for utility projects. One

has to keep in mind that although this is a small project for a small business (school) the payback

periods should be compared with projects of the same nature (i.e., utility projects) and in such

comparison 6 years is considered a very good payback time. Also, it should be noted that the

project expected life is more than 25 years which is over five times the payback period. As for

the IRR, all scenarios exceed the discount rate (which could be used as an estimate of cost of

capital) significantly which confirms the projects profitability. Nevertheless, given the long safe

revenue generated form the projects that is also adjusted and increased by inflation the higher

discount rates lead to an even higher IRR in comparison to the low discount rate scenarios.

Therefore, it can be seen that projects like this basically protect the owner from inflation because

as the prices go up, the saving brought by the project increases. This means that the project is

economically profitable and feasible under even the worst conditions. The cash flow diagrams

and other detailed financial tables are provided in the appendix B. Also based on this, the cost of

electricity for school with installing solar panel would be approximately 6 USD cent/kWh which

shows a significant reduction comparing to the current cost which is about 21 USD cent/kWh.

It should however be mentioned that all the above is based on the assumption that the

school will pay its electricity bill as opposed to the current state where the bill is paid directly by

the government. This does not impact our analysis in terms of the costs and benefits. Whoever

makes the payments becomes the main beneficiary of the savings.

26

Also, we have based the analysis on the costs of the project from the school’s point of

view. It is a little different from the perspective of our organization as we also incur other costs.

These include the cost for holding the workshops in the school and purchasing educational

material like solar kits for the students. We anticipate needing 12 kits each costing $100. These

additional costs were excluded from the financial model as they are separate from the project and

have educational purposes beyond the scope of this single project.

Table 2. Total estimated costs

Panels installation $11,000

Training devices (Solar Kits, solar and candle boats, wires)

$1,500

Purchasing 5 computers for the internet cafe4 $2,000

(Ghajari, 2018)

Depending on how we plan to expand the project other possible costs in the future can

include:

• Replacement of school stove with an electrical one

• Replacement of water heater with a solar or electrical one

• Providing heating system for the school

• Installing recycle bins in the school

• Replacement of lamps with high efficiency ones

• Replacement of taps with sensor controlled ones

4 We have estimated the cost of each computer at 400. This can decrease by going for lower specifications.

27

3.2.2 Possible scenarios for handling the project’s cost

There are several plausible scenarios for funding of a project like this. These scenarios

can range from funding entirely based on donations to considering the project a self sustaining

business case. Below we briefly touch on these scenarios and justify our choice.

• Fund raising: This involves finding one or a few sponsors as well as crowd funding through

websites such as budfunding.com. Given that the major barriers to project like this are mental

and perceptional barriers, this can be a good solution for starting the conversation and

making schools familiar with the concept. As the project is proven successful, future projects

and next schools can use more self-sustained models as described below. Still, under the

current donation model, we can have the school pay a portion of their savings to Nature’s

ride to be used for building similar projects in other schools. Alternatively, we can ask the

school to commit a percentage of the savings to other sustainable projects within the school.

Examples include adding a recycling cart in the school for each class, replacing the tabs and

lights with sensor ones etc.

• Phased approach: Do the project step by step. (E.g., add additional panels as time goes by)

and use the savings occurred in each phase to pay the costs of next phase of PV installation.

This may be a good idea for a bigger project and for when the project is initiated by the

school itself. Bu when done by an outside party like Nature’s Ride, the costs of monitoring

and upgrading the project (e.g., cost of frequent travels to the school, possible costs for

matching of new panels with the old ones etc.) in the long run can actually make the project

much more expensive than it is and make it unfeasible.

• Financing: Using debt to fund the project and pay back the loan from savings. This is a

completely feasible solution given our calculations of the NPV, IRR, and other financial

28

measures. However, people are difficult to convince as there are not many success stories and

buzz around such projects yet. After a few years and after a few successful projects like this,

this approach will be more acceptable by the community. Further, as mentioned before, right

now the government pays for the school’s electricity bill. This option can only make sense

when this changes in the future as predicted by many.

3.2.3 Fundraising

As discussed in the previous section. The best approach for funding the project at this

time is through fund raising and donation. Since this project is run by a non-profit organization

we need to raise funds to cover the initial costs of the project as well as maintenances, training,

and ongoing support. Fund raising can be done through following means:

1) Contacting funding organizations, filling the application form and asking them to support

the project.

2) Targeting the larger companies which are in Zacatecas or nearby and talking to them,

preferably face to face. We can explain the project and the advantages which it brings for

the world, society, and children which are our main focus. We could make a case and

pursue them to fund the project in return for recognition and better reputation as well as

fulfilling their corporate citizenship and corporate social responsibilities (CSR). This

project would be a great opportunity for the companies who provide funds to us to be

more known and promote their reputation in the community and media. One of our target

companies for this approach is Peñoles, the second largest mining companies in Mexico.

3) Another groups of companies on which we are focusing includes the large Canadian

companies with operations in Mexico. Again, we anticipate that improving their

29

reputation is a good reason for them to help with the project. Some of these companies

are listed here (Gavasa, 2017):

• Magna International, main manufacturer of car parts in Canada

• Scotiabank, The Mexico-based subsidiary of The Bank of Nova Scotia

• Goldcorp, one of the utmost mining companies in Mexico. The Canadian

company presently exploits Peñasquito mine in Zacatecas

• Bombardier which has had operations in Mexico for almost 25 years

We will also be using the help of Canadian Embassy in Mexico and the Mexican

consulate in Calgary to identify and contact companies and individuals that may be willing to

support this project.

4) We will also try some crowdfunding sites such as Kickstarter .com and budfunding,com

to raise money. For this we have prepared a PowerPoint presentation as well as a short

video snippet.5

5) Grants and funds provided by the University of Calgary are also an option that we have

considered.

Many solar installations fail in their first year of operations for lack of maintenance, lack

of training, inadequate governance, and other human errors. This includes periodical cleaning of

the system and regular housekeeping tasks. We mainly rely on training the local community

including the teachers and school officials for this. We are also evaluating some opportunities to

secure some funding for such purposes through creating value added from the generated

5 https://www.youtube.com/watch?v=qXQp4E1mzPk&t=2s

30

electricity. An example is building an Internet Café to serve the people in that area. These

activities will generate some income and secure an emergency fund for potential unpredicted

costs in the future.

3.3 Environmental Impacts

The environmental benefits of this project include replacing fossil fuels with a renewable

clean energy, reducing the GHG emissions, and enabling the children to grow in a more

sustainable world safeguarding a better prospect for their future. For exact measurement of these

impacts we used RETScreen to find the carbon off-set. The off-set is 3.1 tons CO2 which is equal

to 7.2 barrels of crude oil. Of course, for this small size of project we didn’t anticipate too much

carbon off-set. The results look more impressive when noting that the project reduces the

emission from 3.3 tons to 0.2 which amounts to 93% reduction.

Figure 8. GHG emission reduction causing by the project


31

3.4 Social impacts

3.4.1 Social benefits and activities

The project’s main goal is to create a living laboratory to help children think sustainably

and to make the environmental concerns and considerations an integral part of their lives. This is

in line with the pedagogical philosophies used in the development of the Mexican education

curriculum that emphasize experiential learning and use of educational material for a deeper

learning experience (Mexican Secretary of Public Education, 2011).

The students can be allowed to run experiments with solar panels, (e.g., try running

different machines and appliances using the generated power, clean them, try shading them

panels and measure the change in the generated electricity, etc.) Also, to raise the social

awareness of teachers and students and even the community by this project the plan is to hold

workshops and training for the students and teachers in the school and help them to get more

familiar with sustainability approaches including global warming, renewable energies, and solar

energy. In the workshops, we plan to teach them how the solar panels work, different other

applications of the solar panels, and the benefits of the solar panels over other alternatives.

Further, as we move forward, and depending on our success in creating a sustainability culture,

we plan to engage in additional activities to strengthen sustainable understanding. Some such

potential activities include:

• Possibility of having a community garden

• Waste organization for the school in different classes

• Establishing an internet café. This may not be a very attractive option for this project since

the community already has access to Wi-Fi in their homes. Nevertheless, the generally poor

32

connection quality in the city may make it a viable option. The concept can be more practical

in future for the next projects.

3.4.2 Method for measuring social impact

Measurement of social impact is a key to evaluation of the success of environmental and

social projects. Such measurements help the owner organization – whether it is a for-profit or

non-profit - to better understand the impact of its activities and further adjust them in the future.

A great portion of the existing literature on measurement of social impact of micro grid and

home generation solar energy projects focus on east Africa, India and other extremely deprived

regions and countries (Olazabal, 2018) (Shoaib, 2016). In such settings, the social impact is

usually measured by looking at the household and using indicators such as increased usage of

electricity, purchase of appliances such as phones and refrigerators, or even increases in the

general literacy rate.

Nevertheless, in more developed countries like Mexico, where there is already a reliable

grid access and the use of renewables is more a replacement of the existing grid rather than the

only source of access to electricity, the focus of the social impact shifts to other measures that

evaluate the community’s knowledge about the renewables and their value, social bonds within

the community, happiness from the aesthetics of the renewable systems, tourism, and possibly

job creation (Hicks, 2014).

Our project focuses on a more developed country – Mexico- and provides the solar

energy to a school rather than to homes. Therefore, our goal is to educate the students, teachers,

and the community to be more familiar with sustainability issues and concerns including global

warming, renewable energies and solar energy and our main focus will be on creating

environmental awareness among the children.

33

We have prepared a sample survey to be run twice, one baseline survey before the

implementation of the project, and another survey a year after so that we can measure the change

in awareness, attitude and knowledge about various sustainability dimensions. This survey will

be run for the teachers, parents and with simplified questions for the students.

Survey questions about sustainability knowledge and attitude

Please provide your answers in a 1-5 scale from 1-strongly disagree to 5-strognly agree:

• I know about global warming.

• I am knowledgeable about solar energy

• use of non-renewable energy is dangerous?

• it is a good idea for the school to spend some of its money to recycle and separate the

school’s waste?

• it is a good idea for the school to have a community garden?

• I care about not wasting water and electricity

• I consider switching to solar energy electricity for my home

• I believe it is financially advantages to switch to solar electricity for my home?

• it is important that my school sources its energy from solar panels

• How many hours have you spent learning about renewable energies in the past year?

(e.g., through self-reading, class discussion, watching TV etc.)

• How many sources of renewable energy can you count?

• Do you recycle and compost your waste?

34

Chapter 4. Limitations, Further Research and Conclusion

4.1 Limitations and Further Research

In this project we faced some limitations in our work that if avoided could improve the

future projects. These include the language barrier which hindered my communication with the

school, funders, and the community, the timing of the major part of the project time in summer

where the school was closed, and the focus of many Canadian funding organizations on projects

implemented inside Canada. Further, given that the educational and social impacts of such

projects are the more important parts of such efforts, future projects could improve on these

aspects by introducing a more complete sustainability package that includes cooling and heating

using solar energy, replacement of various equipment in the school such as lamps, taps, and

recycling bins with more sustainable versions including high efficiency lamps, sensor taps and

lamps, and segregated recycling bins.

4.2. Conclusion

In this study, we considered a school in rural part of Mexico as a sample to do a

feasibility study of switching electricity from fossil fuel sources to a clean and renewable solar

source. Our aim for doing this project was to investigate if these kinds of projects are

economically feasible and evaluate the social, environmental and finance (the three pillars of

sustainability) cost and benefits. The analysis has been done with RETScreen and verified by

manual calculations. Based on our analysis the payback period of this project is around 6 years

and the IRR ranges from 16% to 21% which means the project is economically feasible. The

environmental analyses show carbon reduction would be 93% which shows huge benefits of

such projects on the environment. We have planned some social trainings and activities which

we will implement in our trip to Mexico during Fall. The social impacts of the project will be

35

measured through a baseline survey before starting the project and a follow-up survey after

finishing the project. Also, the opportunities for fund-raising for the project have been evaluated

and a fund-raising campaign is being designed.

36

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Appendix A. Business Model Canvas

Key Partners

• Nature’s Ride organization

• Narciso Mendoza school

• Funding organization • Electrifica Solar

Company

Key Activities

• Fund raising • Purchase and installation of

the system • Present the project to the

companies and fund-raising organization by filling the application or face to face interactions

Value Propositions

For students:

• Having powered school with clean energy

• Gaining some knowledge about solar system and sustainability

For School:

• Decreasing in electricity cost as well as being more sustainable

Customer

Relationships

• Training for students

•

Customer Segments

• Low to mid income schools

Key Resources

• Knowledge about solar systems and the companies in Mexico

Channels

• School’s principle

Cost Structure

• Installing the solar panels, • Maintenance cost for life time of the system • Cost of training for students

Revenue Streams

• Possible revenue from building an internet cafe • Saving money with paying less for the electricity bill

(The beneficiary for now is the government)

Social & Environmental Cost

• Training Cost • PV recycling (negligible)

Social & Environmental Benefit

• Helping save the environment by producing clean energy, creating jobs, promoting sustainability culture

(Ghajari 2018)

43

Appendix B. RETScreen calculations

Table 3. RETScreen climate and location data for Zacatecas


Location | Climate dataLocation

Unit Climate data location Facility location

Name Mexico - Loreto - Zacatecas Mexico - ZAC - General PánfiloNatera

Latitude ˚N 22.3 22.7

Longitude ˚E -102.0 -102.1

Climate zone 3C - Warm - Marine 3C - Warm - Marine

Elevation m 2111 2118

Climate data

Heating design temperature 5.4

Cooling design temperature 26.0

Earth temperature amplitude 18.1

Subscriber: University of Calgary – Educational Use Only

44

Table 4. RETScreen detailed climate data for Zacatecas


Month Air temperature

Relative humidity Precipitation

Daily solar radiation - horizontal

Atmospheric pressure Wind speed Earth

temperatureHeating

degree-daysCooling

degree-days

°C % mm kWh/m²/d kPa m/s °C °C-d °C-d

January 11.5 58.9% 11.26 4.53 80.9 4.2 13.3 203 45February 13.3 51.2% 7.63 5.47 80.8 4.3 16.0 132 92March 15.9 40.0% 14.68 6.46 80.7 4.5 19.6 65 183April 18.8 39.6% 11.11 6.77 80.7 4.2 23.2 0 263May 20.3 47.7% 32.60 6.88 80.7 3.6 24.8 0 318June 19.3 66.8% 63.65 6.55 80.7 3.1 22.8 0 279July 18.1 72.7% 100.18 6.26 80.9 3.1 20.9 0 252August 18.2 71.3% 77.80 6.18 80.9 2.9 21.1 0 254September 17.2 74.3% 74.62 5.43 80.8 3.3 19.8 23 217October 15.5 72.5% 36.71 5.29 80.9 3.4 17.9 78 170November 13.5 67.4% 10.68 4.95 80.9 3.8 15.4 135 105December 11.9 62.3% 5.35 4.39 80.9 4.0 13.6 190 58

Annual 16.1 60.4% 446.27 5.76 80.8 3.7 19.0 826 2,236


45

Table 5. RETScreen financial calculations data for scenario 1 - cost and revenue


Financial viabilityFinancial parameters

GeneralInflation rate % 8%

Discount rate % 8%

Project life yr 25

Annual revenue

Electricity export revenueElectricity exported to grid MWh 7

Electricity export rate $/kWh 0.21

Electricity export revenue $ 1,473

Electricity export escalation rate % 8%

Costs | Savings | Revenue

Initial costsInitial cost 100% $ 10,179

Total initial costs 100% $ 10,179

Annual costs and debt payments

O&M costs (savings) $ 172

Total annual costs $ 172

Annual savings and revenueElectricity export revenue $ 1,473

Total annual savings and revenue $ 1,473


46

Table 6. RETScreen financial calculations data for scenario 1 - viability


Financial viability

Pre-tax IRR - equity % 21%

Pre-tax IRR - assets % 21%

Simple payback yr 7.8

Equity payback yr 5.9

Net Present Value (NPV) $ 22,354

Annual life cycle savings $/yr 2,094

Benefit-Cost (B-C) ratio 3.2

Energy production cost $/kWh 0.193


47

Table 7. RETScreen sensitivity analysis for scenario 1


Perform analysis on Equity paybackNumber of combinations 500Random seed No

Parameter Unit Value Range (+/-) Minimum Maximum

Initial costs $ 10,179 25% 7,634 12,724

O&M $ 172 25% 129 215Electricity exported to grid MWh 7.01 25% 5.26 8.77

Electricity export rate $/MWh 210.00 25% 157.50 262.50

Median yr 5.9

Level of risk % 10%

Minimum within level of confidence yr 4.9

Maximum within level of confidence yr 7.3


48

Table 8. Annual cash flows for scenario 1


Yearly cash flows

Year Pre-tax Cumulative# $ $

0 -10,179 -10,1791 1,405 -8,7742 1,518 -7,2563 1,639 -5,6164 1,770 -3,8465 1,912 -1,9346 2,065 1317 2,230 2,3618 2,409 4,7709 2,601 7,371

10 2,809 10,18111 3,034 13,21512 3,277 16,49213 3,539 20,03114 3,822 23,85315 4,128 27,98116 4,458 32,43917 4,815 37,25418 5,200 42,45419 5,616 48,07020 6,065 54,13521 6,551 60,68622 7,075 67,76123 7,641 75,40124 8,252 83,65325 8,912 92,565


49

Figure 9. Annual cash flows for scenario 1


Executive summary

This report was prepared using the RETScreen Clean Energy Management Software. The key findingsand recommendations of this analysis are presented below:

Target

Electricity exported to grid Electricity export revenue

GHG emission reduction

MWh $ tCO₂

Proposed case 7 1,473 3.2

The main results are as follows:

Cash flow - Cumulative

Disclaimer: This report is distributed for informational purposes only and does not necessarily reflect the views of the Government ofCanada nor constitute an endorsement of any commercial product or person. Neither Canada nor its ministers, officers, employeesor agents make any warranty in respect to this report or assumes any liability arising out of this report.


Appendix B_Scenario

50





Discount rate % 8%

Project life yr 25

Annual revenue

Electricity export revenueElectricity exported to grid MWh 6.8













51



Financial viability

Pre-tax IRR - equity % 19.3%

Pre-tax IRR - assets % 19.3%








52





Initial costs $ 10,962 25% 8,222 13,703



Median yr 6.5

Level of risk % 10%


Maximum within level of confidence yr 8


53

Table 12. Annual cash flow for scenario 2


Yearly cash flows


0 -10,962 -10,9621 1,347 -9,6152 1,455 -8,1593 1,572 -6,5884 1,697 -4,8905 1,833 -3,0576 1,980 -1,0777 2,138 1,0618 2,309 3,3709 2,494 5,864

10 2,694 8,55811 2,909 11,46712 3,142 14,60913 3,393 18,00214 3,665 21,66615 3,958 25,62416 4,274 29,89817 4,616 34,51518 4,986 39,50019 5,384 44,88520 5,815 50,70021 6,280 56,98022 6,783 63,76323 7,325 71,08924 7,912 79,00025 8,544 87,545


54

Figure 10. Annual cash flow for scenario 2


Cash flow

Annual

Cumulative


55





Discount rate % 5%

Project life yr 25

Annual revenue

Electricity export revenueElectricity exported to grid MWh 7













56



Financial viability










57





Initial costs $ 10,179 25% 7,634 12,724



Median yr 6.5

Level of risk % 10%




58



Yearly cash flows


0 -10,179 -10,1791 1,366 -8,8132 1,435 -7,3783 1,506 -5,8724 1,582 -4,2905 1,661 -2,6296 1,744 -8857 1,831 9468 1,923 2,8699 2,019 4,887

10 2,120 7,00711 2,226 9,23312 2,337 11,57013 2,454 14,02414 2,576 16,60015 2,705 19,30516 2,841 22,14617 2,983 25,12918 3,132 28,26019 3,288 31,54920 3,453 35,00121 3,625 38,62722 3,807 42,43323 3,997 46,43024 4,197 50,62725 4,407 55,034


59



Cash flow

Annual

Cumulative


60





Discount rate % 5%

Project life yr 25

Annual revenue

Electricity export revenueElectricity exported to grid MWh 6.8













61



Financial viability










62





Initial costs $ 10,962 25% 8,222 13,703



Median yr 7.2

Level of risk % 10%




63



Yearly cash flows


0 -10,962 -10,9621 1,310 -9,6522 1,376 -8,2763 1,444 -6,8324 1,517 -5,3165 1,592 -3,7236 1,672 -2,0517 1,756 -2968 1,843 1,5489 1,935 3,483

10 2,032 5,51511 2,134 7,64912 2,241 9,89013 2,353 12,24214 2,470 14,71315 2,594 17,30616 2,723 20,03017 2,860 22,88918 3,003 25,89219 3,153 29,04520 3,310 32,35521 3,476 35,83122 3,650 39,48123 3,832 43,31324 4,024 47,33725 4,225 51,561


64



Cash flow

Annual

Cumulative


65

Appendix C. The school’s electricity bill

kWh

$4,528.00(CUATRO MIL QUINIENTOS VEINTIOCHO PESOS 00/100M.N.)

124 060 256 510

20 NOV 17

ESC PRIM NARCISO MENDOZA5 DE MAYO 1STA ELENA. C.P. 98760SANTA ELENA, ZAC..

11DP58C201103350 General < 25kW 02 2

Num. de Lectura Lectura Mult. ConsumoMedidor actual anterior kWh9C869W 80792 79642 1 1150

06 SEP 17AL

06 NOV 17

61 18.85 74.22

Concepto kWh Precio Subtotal1er. Escalón2do. EscalónExcedenteCargo fijo (2)Suma

100 2.546 254.60100 3.068 306.80950 3.382 3,212.90

64.520 129.041,150 3,903.34

Corte a partir de 21 NOV 17.

Aviso-recibo informativo. Servicio incluido

en convenio de cobranza centralizada.

Su consumo de energía eléctrica está dentro

del rango excedente.

La gráfica representa tu consumo de energía y el nivel de uso

Energía 3,903.34IVA 16% 624.53Fac. del Periodo 4,527.87Diferencia por redondeo 0.83Total $4,528.70

-1-

Fecha, hora y lugar de impresión: 25 JAN 2018 01:37:26 hrs. ExpedidoEnCalle ExpedidoEnNoExt ExpedidoEnNoInt ExpedidoEnCol ExpedidoEnLocExpedidoEnMpio ExpedidoEnEdo ExpedidoEnPais ExpedidoEnCP

12406025651001 124060256510 000000 000000000 3

11DP58C201103350 Cobranza Centralizada

$4,528.00(CUATRO MIL QUINIENTOSVEINTIOCHO PESOS 00/100 M.N.)

"QQFOEJY�$

66

Adapted from: (Narciso Mendoza school, 2017)

Adeudos anteriores

del 07 JUL 17 al 06 SEP 17 Normal 844 $3,337.00 $3,337.00

del 09 MAY 17 al 07 JUL 17 Normal 862 $3,471.00 $3,471.00

del 08 MAR 17 al 09 MAY 17 Normal 1034 $4,382.00 $4,382.00

del 06 ENE 17 al 08 MAR 17 Normal 1529 $6,089.00 $6,089.00

del 08 NOV 16 al 06 ENE 17 Normal 933 $3,496.00 $3,496.00

del 06 SEP 16 al 08 NOV 16 Normal 1150 $4,116.00 $4,116.00

del 07 JUL 16 al 06 SEP 16 Normal 487 $1,686.00 $1,686.00

del 09 MAY 16 al 07 JUL 16 Normal 738 $2,352.00 $2,352.00

del 07 MAR 16 al 09 MAY 16 Normal 717 $2,360.00 $2,360.00

del 08 ENE 16 al 07 MAR 16 Normal 887 $2,831.00 $2,831.00

del 06 NOV 15 al 08 ENE 16 Normal 731 $2,232.00 $2,232.00

Adeudo Total $0.00

Aviso-recibo informativo. Servicio incluido en convenio de cobranza centralizada.Le invitamos a consultar y aplicar las medidas de ahorro de energía eléctrica publicadas en www.cfe.gob.mx omarque al 071.

El Gobierno Federal trabaja contra la impunidad, con tu ayuda fortalecemos la lucha.Secretaría de la Función Pública quejas y denuncias al Teléfono:

RFCESC PRIM NARCISO MENDOZA5 DE MAYO 1SANTA ELENA, ZAC..Serie: PJ Folio: 000015725750Folio Fiscal: UUIDNo. Certificado del SAT: No. Certificado del CSD: 00001000000404010245Fecha y hora de certificación:Unidad de medida: No Aplica Pago en una sola exhibiciónMétodo de pago: NA Este documento es una representación impresa de un CFDIRégimen Fiscal: RÉGIMEN GENERAL DE LEY DE PERSONAS MORALES

Cadena original| | 1 . 0 | UUI D| | | | | |

Sello Digital del CFDI Sello Digital del SAT