A systems framework for incorporating environmental, social and resource management risks into financial analytics for renewable solar energy investments
Creators: name: Mbuk, Kofi
Publisher: name: Imperial College London
Year: 2018

description: Renewable solar energy is increasingly being used as a source of energy and a promising alternative to conventional energy sources. Currently, the growth of renewable energy, specifically solar energy, is in a period of transition, especially in developing and emerging countries, despite strong generation forecasts in this sector. Uncertainties regarding the risks involved in solar energy asset acquisition continue to hinder its deployment, and solar energy, like its conventional energy counterparts (oil, gas, coal), is also guilty of adopting unsustainable practices that are damaging to the environmental and social welfare of host countries. The aim of this research was to develop an integrated energy model tool (also referred to as solar energy investment decision-making tool) for assessing the financial viability and sustainability of solar energy investments to deliver a more holistic outcome for decision makers. The goal is that its application will facilitate the increased deployment of solar energy globally, by reducing the risks for investors. To achieve this, this research developed a methodological framework that linked energy modelling with a conceptual systems model for addressing solar energy risks. The conceptual systems model for addressing solar energy risks was developed by incorporating thirty-seven relevant solar energy risks necessary for the successful deployment of solar energy assets. The conceptual systems model also mapped out different factor relationships between risks and how they interrelate with one another in order to enable decision-makers better understand the different components and relationships between components of the conceptual model. The developed solar energy investment decision-making tool was designed from collected information stored on an internal and an external database, which was integrated through an automated process that used complex calibration formulas and algorithmic codes. Findings from the research suggest that the developed tool is capable of identifying potential country-specific market uncertainties and policy risks along with their likelihood of occurrence and severity of impact, to help decision-makers better understand the holistic outcome of solar energy investments and if necessary develop mitigation strategies in the planning stage to enable them better tackle these impacts. The tool also guides the decision makers in adopting the best sustainable practice for the project to avoid harmful social and environmental impacts. The tool is best applied at the pre-investment phase and has been developed for solar energy stakeholders in finance, consultancy, manufacturing and academia It is intended that the developed solar energy investment decision-making tool has the potential to play a vital role in enabling decision-makers to effectively measure the holistic viability of solar energy investments, and contribute to the enhanced growth of solar energy investments globally.