LIFE CYCLE COST OF USING ON SITE RENEWABLE

ENERGY FOR THE ELECTRIFICATION OF

INDUSTRIAL BUILDINGS IN SRI LANKA

Nanayakkara Wakwella Kankanamge Vishwa Vimarshana Nanayakkara

142676 E

Dissertation submitted in partial fulfilment of the requirements for the

Honours Degree of Bachelor of Science in Quantity Surveying

Department of Building Economics

University of Moratuwa
Sri Lanka

November 2018
DECLARATION
I declare that this is my own work and this dissertation does not incorporate without
acknowledgement any material previously submitted for a Degree or Diploma in any
other University or institute of higher learning and to the best of my knowledge and
belief it does not contain any material previously published or written by another
person except where the acknowledgement is made in the text.

Further, I acknowledge the intellectual contribution of my research supervisor Ch. QS.

Prof. (Mrs.) Kanchana Perera for the successful completion of this research
dissertation. I affirm that I will not make any publication from this research without
the name of my research supervisor as contributing author unless otherwise I have
obtained written consent from my supervisor.

Also, I hereby grant to University of Moratuwa the non-exclusive right to reproduce

and distribute my dissertation, in whole or in part in print, electronic or other medium.
I retain the right to use this content in whole or part in future works such as articles or
books.

…………………………….. / / 2018
………………….……...
Nanayakkara N.W.K.V.V Date

I hereby acknowledge that Nanayakkara Wakwella Kankanamge Vishwa Vimarsha na

Nanayakkara has followed the dissertation process for the Bachelors Dissertation set
by the Department of Building Economics under my supervision.

…………………………….. / / 2018
………………………...
Ch. QS. (Mrs) Prof. Kanchana Perera Date
Dissertation Supervisor

i
ABSTRACT

Life Cycle Cost of using on site renewable energy for the electrification of
Industrial Buildings in Sri Lanka

Industrial and building sectors consume a substantial portion of electrical energy. Integrating
non depleting renewable energy sources instead of depleting fossil fuels to generate electricity
in the industrial sector buildings plays an important role in sustainable energy policies which
are now implemented internationally and locally. There is a persistent belief among building
owners that combining on site renewable energy systems to buildings is not cost effective. A
Life Cycle Cost (LCC) approach is suitable to fairly determine the cost effectiveness of onsite
renewable energy systems. Thus this research aimed evaluating the suitability of onsite
renewable energy sources for electrification of industrial buildings in Sri Lanka. A qualitative
research approach was followed through ten expert interviews and six case studies. Content
analysis was used as the data analysis tool.
According to the findings of expert interviews solar and biomass are the only sources
applicable onsite in Sri Lanka. Three case studies were carried out for each solar and biomass
energy systems to calculate the LCC associated with electricity generation. LCC calculation
was followed with a sensitivity analysis . According to LCC, solar power is more suitable to
be implemented as an onsite renewable energy source for electricity generation. Although,
biomass stay behind in terms of cost benefit and capacity of power generation compared to
solar power, biomass is a more sustainable option as it encourages proper waste management
of the building while eliminating the risk of the emission of harmful bio methane. Wind power
also has a potential to be used as an onsite renewable energy source. However, wind has
become inapplicable onsite as wind is financially beneficial when only applied as an offsite
source in large scale. Other renewable sources have not been developed yet technically to
generate electricity onsite or offsite with required financial feasibility in Sri Lanka
Key words: Onsite Renewable Energy, Industrial Buildings, Electricity Generation, Life
Cycle Cost (LCC)

ii
DEDICATION

I dedicate this piece of work to my

beloved parents for their endless
commitment, affection and
encouragement

iii
ACKNOWLEDGEMENT
This research would not be a reality without the assistance and guidance of many
individuals and organisations. Therefore, I make this an opportunity to express my
gratitude for everyone who contributed in numerous ways, sharing their knowledge
and experience

First and foremost, I would like to express my sincere gratitude to my supervisor Ch.
QS. Prof. (Mrs) Kanchana Perera for the great commitment, guidance and
encouragement given throughout the research. Further, I extend my gratitude to Ms.
Navodana Rodrigo and Ms. Abhirami Sivakumar for providing assistance to carry out
the research.

My sincere gratitude shall also be extended to Dr. Yasangika Sandanayake, Head of

the Department of Building Economics and rest of the academic and non-academic
staff of the department for the immense guidance and support given throughout the
research and four years of my academic career

Without the support, guidance and knowledge provided by the experts in the industry
this research would never be a success. Therefore, I extend my gratitude for the expert
and professionals in the industry who allocated their valuable time for providing
required knowledge

Last but not least I express my heartfelt gratitude to all my family members, all my
batch mates and senior sisters and brothers for sharing their experience and knowledge
throughout the study

Nanayakkara N.W.K.V.V

October, 2018

iv
TABLE OF CONTENT
ABSTRACT ..................................................................................................................ii
TABLE OF CONTENT ............................................................................................... iii
LIST OF TABLES ..................................................................................................... viii
LIST OF FIGURES......................................................................................................ix
LIST OF ABBREVIATIONS ...................................................................................... x

CHAPTER 01............................................................................................................... 1
1.0 INTRODUCTION ......................................................................................... 1
1.1 Background .................................................................................................... 1
1.2 Problem Statement ..................................................................................... 4
1.3 Aim ................................................................................................................. 5
1.4 Objectives ....................................................................................................... 5
1.5 Research Methodology................................................................................... 5
1.5.1 Literature Review .................................................................................... 5
1.5.2 Expert Interviews .................................................................................... 5
1.5.3 Case study ............................................................................................... 5
1.6 Scope and limitations ..................................................................................... 6
1.7 Chapter Breakdown ........................................................................................ 6

CHAPTER 02............................................................................................................... 7
2.0 LITERATURE REVIEW .............................................................................. 7
2.1 Introduction .................................................................................................... 7
2.2 Energy crisis ................................................................................................... 7
2.3 Energy consumption..................................................................................... 10
2.3.1 Energy consumption in different types of buildings ............................. 10
2.3.2 Energy consumption in Industrial Buildings......................................... 10
2.4 Electricity generation ................................................................................... 12
2.5 Electricity Usage in Industrial Buildings ..................................................... 13
2.6 Renewable energy ........................................................................................ 14
2.6.1 What is renewable energy ..................................................................... 14
2.6.2 Renewable energy sources .................................................................... 15
2.6.3 Solar Power ........................................................................................... 16
2.6.4 Wind Power ........................................................................................... 17

v
 2.6.5 Hydro Power ......................................................................................... 18
2.6.6 Biomass ................................................................................................. 19
2.6.7 Other renewable energy sources ........................................................... 20
2.7 Onsite Renewable Energy generation .......................................................... 20
2.7.1 What is on site renewable energy.......................................................... 20
2.8 Renewable Energy generation in Sri Lanka ................................................. 22
2.9 Life Cycle Cost............................................................................................. 24
2.9.1 What is Life Cycle Cost ........................................................................ 24
2.10 Evaluating Life Cycle Cost ........................................................................ 24
2.11 Cost components of Life Cycle costing ..................................................... 27
2.12 Need of Identify benefit gained by using onsite renewable energy by using
LCC concept....................................................................................................... 28
2.13 Theoretical model....................................................................................... 29
2.14 Summary .................................................................................................... 32

CHAPTER 03............................................................................................................. 33
3.0 RESEARCH METHODOLOGY ................................................................ 33
3.1 Introduction .................................................................................................. 33
3.2 Research Design ........................................................................................... 33
3.3 Research Approach ...................................................................................... 33
3.3.1 Available research approaches .............................................................. 33
3.3.2 Selected Research Approach for this Study .......................................... 34
3.4 Available Research Methods........................................................................ 35
3.4.1 Expert Interviews .................................................................................. 35
3.4.2 Case Study ............................................................................................. 36
3.5 Data analysis techniques .............................................................................. 36
3.5.1 Analysing expert interviews.................................................................. 36
3.5.2 Analysing Case Study ........................................................................... 37
3.6 Research Process .......................................................................................... 38
3.7 Summary ...................................................................................................... 39

CHAPTER 04............................................................................................................. 40
4.0 ANALYSIS AND RESEARCH FINDINGS .............................................. 40
4.1 Introduction .................................................................................................. 40
4.2 Findings and analysis of Expert interviews.................................................. 40

vi
 4.2.1 Objectives of Expert interviews ............................................................ 40
4.2.2 Details of the interviewees of expert interviews ................................... 41
4.2.3 Suitable on site renewable energy sources in Sri Lanka ....................... 42
4.2.4 Life Cycle Cost components of Solar power ........................................ 60
4.2.5 Life Cycle Cost components of Biomass .............................................. 61
4.3 Findings and analysis of Case Studies for solar power ................................ 61
4.3.1 Case 1 (SC1).......................................................................................... 63
4.3.2 Case 2 (SC2).......................................................................................... 64
4.3.3 Case 3 (SC3).......................................................................................... 65
4.4 Findings and analysis of Case Studies for Biomass ..................................... 68
4.4.1 Case 1 (BC1) ......................................................................................... 69
4.4.2 Case 2 (BC2) ......................................................................................... 69
4.4.3 Case 3 (BC3) ......................................................................................... 70
4.5 Sensitivity Analysis...................................................................................... 73
4.5.1 Factors to be considered in Sensitivity Analysis for Solar power......... 73
4.5.2 Factors to be considered in Sensitivity Analysis for Biomass .............. 74
4.6 Discussion .................................................................................................... 78
4.7 Summary ...................................................................................................... 80

CHAPTER 05............................................................................................................. 81
5.0 CONCLUSIONS AND RECOMMENDATIONS ......................................... 81
5.1 Introduction .................................................................................................. 81
5.2 Overview of the objectives........................................................................... 81
5.3 Recommendations ........................................................................................ 83
5.4 Limitations ................................................................................................... 84
5.5 Further Research .......................................................................................... 84

References .................................................................................................................. 85
APPENDIX A – OPERATION AND MAINTENANCE COST CALCULATION OF
BIOMASS ................................................................................................................ 102
APPENDIX B – EXPERT INTERVIEW GUIDELINE.......................................... 105
APPENDIX C – GUIDELINE FOR CASE STUDY .............................................. 110

vii
LIST OF TABLES

Table 2-1:Expected energy depletion........................................................................... 9

Table 2-2:Renewable energy sources......................................................................... 16
Table 2-3:On site renewable energy........................................................................... 22
Table 2-4: Energy generation in Sri Lanka ................................................................ 22
Table 2-5: LCCA classification.................................................................................. 25
Table 2-6:Cost elements of energy systems ............................................................... 27
Table 4-1:Details of the interviewees of Expert Interviews....................................... 41
Table 4-2:Renewable energy sources and their on-site applicability......................... 42
Table 4-3: Factors to be considered when using solar power .................................... 43
Table 4-4:Opportunities for using solar power in Sri Lanka ..................................... 45
Table 4-5:Benefits of using Solar Power ................................................................... 46
Table 4-6:limitation of using Solar Power ................................................................. 47
Table 4-7:Factors to be considered when using Wind Power .................................... 49
Table 4-8:Oppotunities and benefits of using Wind Power ....................................... 50
Table 4-9:Limitations of using Wind Power.............................................................. 51
Table 4-10:On site applicability of Wind Power ....................................................... 52
Table 4-11:Factors to be considered when using Biomass to generate electricity..... 53
Table 4-12:Opportunities and benefits of using Biomass .......................................... 54
Table 4-13: Limitations of using Biomass ................................................................. 55
Table 4-14: Energy generation from Biomass ........................................................... 57
Table 4-15:LCC components of solar power system ................................................. 60
Table 4-16: LCC components of Biomass plant ........................................................ 61
Table 4-17:Details of cases for solar power systems ................................................. 62
Table 4-18:Summary of cost components of solar power.......................................... 62
Table 4-19:Industrial Tariff rates provided by CEB .................................................. 65
Table 4-20: LCC of solar systems.............................................................................. 67
Table 4-21:Details of the case studies for biomass .................................................... 68
Table 4-22:Summary of Cost Components of Biomass............................................. 68
Table 4-23:LCC of Biomass Systems ........................................................................ 72
Table 4-24:Factors to be considered for sensitivity analysis of solar power ............. 73
Table 4-25:Factors to be considered in Sensitivity Analysis for Biomass ................. 74
Table 4-26:Sensitivity Analysis of Solar Power ........................................................ 75
Table 4-27:Sensitivity Analysis for Biomass............................................................. 76

viii
LIST OF FIGURES
Figure 1-1 : Chapter Breakdown .................................................................................. 6
Figure 2-1: World Energy Consumption by energy source ......................................... 8
Figure 2-2:Total Energy Consumption by sector ....................................................... 11
Figure 2-3:Energy consumption by different forms of energy .................................. 12
Figure 2-4: Share of net electricity generation ........................................................... 13
Figure 2-5:Total final Electricity consumption by sector .......................................... 14
Figure 2-6:Potential of generating hydro power ........................................................ 19
Figure 2-7:LCCA Approach....................................................................................... 27
Figure 2-8:Theoretical Mode ..................................................................................... 31
Figure 3-1:Research Process ...................................................................................... 38

ix
LIST OF ABBREVIATIONS
CEB – Ceylon Electricity Board

DPV – Discounted Present Value

IEA – International Energy Agency

LCC – Life Cycle Cost

LCCA – Life Cycle Cost Analysis

x
 CHAPTER 01
1.0 INTRODUCTION

1.1 Background

Construction industry has a considerable impact on the natural environment (AlSanad,

2015). Moreover, author pointed out that construction industry is responsible for a
large portion of global CO 2 emissions and a major consumer of both natural resources
and energy sources. In order to eliminate the negative impacts of construction industry,
there is an emerging concern among construction stakeholders to make building
activities more sustainable (Halliday, 2008). Renewable energy sources have a higher
potential to contribute to the sustainable development, delivering socioeconomic and
environmental benefits (del Rı´o & Burguillo, 2008).

Buildings consume a larger portion of energy all over the world (Cabeza, Rincón,
Vilariño, Pérez, & Castell, 2014). According to Sri Lankan energy statistics, building
sector uses more energy than other industrial sectors and transportation sector (De
Silva & Sandanayake, 2012). Heavy usage of energy resources has caused
environmental impacts such as ozone layer depletion, global warming and climate
changes (Pe´rez-Lombard, Ortiz, & Pout, 2008). The global energy requirements are
mainly fulfilled by fossil fuels (Johansson, 2013). Increase in energy demand and the
scarcity of fossil fuels encourage energy system designers to create more updated
designs (A.T.D Perera, Attalage, Perera, & Dassanayake, 2013). A reduction in energy
consumption can be achieved by transforming from fossil fuels to renewable energy
(Almeida & Ferreira, 2017). According to Australian Renewable Energy Agency
(2017) renewable energy is the energy produced using natural resources which never
run out. Hydro power, biomass, geothermal, wind and solar energy can be identified
as renewable energy sources (Shaikh, Kucukvar, Onat, & Kirkil, 2017). Wave energy
is another useful renewable energy source available (Lund, 2007).

Renewable energy can be used for heating purposes and for electricity generation as
well (Palzer & Henning, 2013). Demand for energy in the form of electricity is an ever
growing trend (Jean, Brown, Jaffe, Buonassisi, & Bulovic, 2015). When it comes to

1
the Sri Lankan context, currently Sri Lanka has an electricity demand of 10,500 GWh
(Ministry of Power & Energy, 2016).

Usage of renewable energy for electricity generation in the Sri Lankan context, has
started in the early 20th century in most of the plantation companies (Wijayatunga,
2014). According to author plantation companies had used small hydro powerplants.
However due to the increase in energy demand, Sri Lanka shifted towards oil based
thermal power. In addition Sri Lanka has shifted towards generating both conventio na l
and non-conventional renewable energy. Electrical energy generated by new sources
of renewable energy such as small hydro, wind, solar and biomass are known as Non-
Conventional Renewable Energy (Ministry of Power & Renewable Energy, 2015).

Generating renewable energy can be categorised into two types based on the
technology used, as on site and off site (Marszal, Heiselberg, Jensen, & Nørgaard,
2012). Moreover, authors pointed out that, energy generated from systems directly
attached to the building are known as onsite renewable energy while the energy
generated from systems placed outside the building premises are known as off-site
renewable energy. According to Sri Lanka Sustainable Energy Authority (2015),
energy usage can be categorised as domestic, religious, industrial, commercial and
street lighting. According to Ministry of Power & Energy (2016) Sri Lankan energy
consumption comprises of 38% domestic users, 39% from industries, 20% from
commercial sector and rest of the energy usage is from religious organisations and
streel lighting. Cambridge Dictionary (2018) define the term “industry” as “the
companies and activities involved in the process of producing goods for sale,
especially in a factory or special area”. Further it describe building as “a structure with
walls and a roof, such as a house or factory”. In any building type cost effective ness
plays an important role (Kale, Joshi, & Menon, 2016). In addition building owners
should focus on cost of the building over its expected life rather than focusing only on
initial construction cost. Further more Life Cycle Cost (LCC) serve as an economic
evaluation technique to analyse total life time cost.

Concept of LCC has been defined by the building and construction assets standard ISO
15686 as a technique used to assess the cost in terms of initial costs and future

2
operational cost (Gluch & Baumann, 2004). According to Fuller and Petersen (1995)
defines lifecycle cost as “the total discounted cost of owning, operating, maintaining,
and disposing of a building or a building system”. Effective Life Cycle Costing
provides an opportunity to use a thoughtful design and implement suitable constructio n
practices (Akadiri, Chinyio, & Olomolaiye, 2012). On the other hand, LCC is an
important tool in achieving cost efficiency in construction projects. Life Cycle Energy
usage has an impact on LCC (Almeida, Mateus, Ferreira, & Rodrigues, 2017).

Life cycle energy usage can be categorized into three types as embodied energy,
operating energy and demolition energy (Cabeza et al., 2014). Further more embodied
energy is the Energy consumed by all the materials used in production, technica l
installations, and energy incurred during renovation. In addition, operational energy is
the energy required for maintaining comfort and day to day maintenance activities and
demolition energy is the energy required for demolition. Operational phase is the major
Life Cycle stage of energy consumption therefore plays an important role in Life Cycle
Analysis (Bastos, Batterman, & Freire, 2013, 2013 ; Ramesh, Prakash, & Shukla,
2010). Investing on renewable energy, reduces energy usage in operational stage of
buildings (Li & Yao, 2009).

Investment on renewable energy can be assessed using various methods (Santos,

Soares, Mendes, & Ferreira, 2014). Further, Net Present Value (NPV) and Payback
Period can be used as LCC assessment methods/tools.

Basic cost components in LCC calculation are initial investment cost, maintena nce
and repair cost and disposal cost (National Institute of Standards and Technology,
2006). Calculating LCC depends upon several assumptions (Bastos et al., 2013).
Moreover assuming constant rate of energy consumption and assuming the building
lifespan are prominent. Currently, cost of solar and wind power is declining all around
the world while prices of oil, coal and other fossil fuels subject to fluctuations (Herzog,
Lipman, & Kammen, 2001). Therefore tranfering towards Renewable Energy has
become a global requirement.

3
1.2 Problem Statement

Buildings effect on global energy usage is high (Torcellini, Pless, Deru, & Crawley,
2006). Renewable energy has the potential to provide energy with sustainability to the
global population (Painuly, 2001). Renewable energy can be used for heating purposes
and electricity generation. Electricity demand is rising gobally and locally as well.
Industrial sector in Sri Lanka contribute with a 39% of electrical energy usage
(Ministry of Power & Renewable Energy, 2015). Therefore, combining renewable
energy for industrial sector buildings would create a substantial impact for the overall
energy consumption. Electricity generation can be done on site or off site (system
attached to the building or away from the building premises). This research focus on
the potential and associated LCC of onsite generation of electricity in industr ia l
buildings using renewable energy. There is a persistent belief that usage of renewable
energy is not efficient in terms of cost (Turner, 1999). In order to comment on the cost
efficiency, a Life Cycle approach is more suitable (Kale et al., 2016). Investme nt
decisions are taken only when there is a possibility to offset initial investment and LCC
through revenue (Fagiani, Barquin, & Hakvoort, 2013). There are plenty of renewable
energy sources available. But all sources cannot be used on site for electric ity
generation. This research focus on identifying available renewable energy sources,
investigate on the on site applicability of renewable energy sources and identify the
LCC associated with electricity generation using selected on site renewable energy
sources. Therefore, this research mainly address two aspects of identifying the on site
applicability of renewable energy sources and LCC associated with electric ity
generation using on site renewable energy systems which has not yet been subjected
to scientific research commonly. On the other hand, investigate on the belief of
inefficiency of using renewable energy sources in terms of cost is another aspect that
would be addressed by the study. Therefore, there is a need to carryout a research on
the selected research topic to address existing literature gap and industrial need

4
1.3 Aim

The aim of the study is to evaluate on the suitability of onsite renewable energy sources
for electrification of industrial buildings in Sri Lanka

1.4 Objectives

Following objectives were selected in order to achieve the aim of the research
1. Identify suitable on site renewable energy sources available
2. To identify the on-site applicability of renewable energy sources in Sri Lanka to
generate electricity
3. To investigate on the concept of Life Cycle Cost
4. To identify the Life Cycle Cost components due to onsite renewable energy usage
for electrification of industrial buildings
5. Evaluate financial benefit of using onsite renewable energy for electrification of
industrial buildings

1.5 Research Methodology

1.5.1 Literature Review

A comprehensive literature review was conducted to identify various renewable

energy sources and to understand the concept of Life Cycle Cost based on journal
articles, conference papers, books, periodicals and electronic sources

1.5.2 Expert Interviews

Semi structured interviews were conducted interviewing ten experts in the industry
who have exposed to the usage of renewable energy for power generation. Availab le
on site renewable energy sources and additional cost components of using Renewable
Energy were identified through interviews.

1.5.3 Case study

Collected information through literature review and expert interviews were applied to
three selected cases for each on site renewable source and Life Cycle Cost of availab le
renewable energy options were calculated in order to compare and contrast the

5
difference in renewable options to justify the most suitable option in terms of Life
Cycle Cost

1.6 Scope and limitations

Research was carried out for electrification of existing industrial buildings using on
site renewable energy considering the operational phase of the buildings

1.7 Chapter Breakdown

Figure 1-1 shows the chapter breakdown and the sequence of the research

• Focuses on introducing the research.

CHAPTER I This chapter include background,
(Introduction) problem statement, aim, objective,
methodology, scope and limitations

• Investigates on the existing literature

CHAPTER II regarding on site renewable energy
(Literature Review) sources and the concept of Life Cycle
Cost

CHAPTER III • Describes the selected research

(Research methodology carried out to collect data
Methodolog) and acheive the aim and objectives

CHAPTER IV
• Presents the collected data and
(Research findings scientifically analyse them
and Analysis)

CHAPTER V • Provides conclusion based on the

(Conclusions and findings and recommend further
researchable areas
Recommendations)

Figure 1-1 : Chapter Breakdown

The research started with a comprehensive literature review. Moreover, the selected
area for the research was scientifically analysed based on the industrial data collected.

6
 CHAPTER 02
2.0 LITERATURE REVIEW

2.1 Introduction

In the previous chapter a background was given to the research. In this chapter
basically describes the background of energy crisis and importance of using
Renewable Energy in the global and Sri Lankan context. Onsite renewable energy
generation is an emerging concept in energy policies nationally and internationa lly.
Investing on on–site renewable energy is getting popular than off site methods.
Employers or the building owners basically focus on initial cost, ignoring the future
operational costs when they make investment decisions on renewable energy systems.
This chapter identify additional cost components of a Renewable Energy system and
derive a path to establish the Life Cycle Cost of on-site Renewable Energy systems.
Further this chapter highlight the importance of focusing on the research on Renewable
Energy usage in Industrial buildings discussing the energy consumption patterns of
other building types and sectors. In addition, Renewable Energy sources are identified
in global and Sri Lankan context and explained. Concept of on-site renewable energy
generation is discussed (Kale et al., 2016).

2.2 Energy crisis

Energy is an integral part of human life and accessible and secured energy usage is
important in shifting towards sustainability in modern socities (Asif & Muneer, 2007).
On the other hand, Demirbas (2005) states that energy act as a prime agent in economic
development, generating wealth. Author further states that energy has become a
critical factor in the world’s future as it has a significant impact on sustainability and
economic aspects

World’s energy usage is increasing rapidly (Pe´rez-Lombard et al., 2008). Describing

the reasons for higher energy demand authors state that increase in global population,
urbanisation and modernisation are the main causes of rapid energy consumptio n.
Shahbaz, Hoang, Mahalik, & Roubaud (2017) has hilighted the relationship between
financial development and energy consumption and states that financial development

7
cause economic development and ultimately energy consumption rises due to
investing on new technologies.

Pe´rez-Lombard et al. (2008) state that global energy consumption relie heavily on
fossil fuels such as oil, gas and coal which is evident from the figure 2.1. At present
global fossil fuel reserves are depleting (Sheehan, Camobreco, Duffield, Graboski, &
Shapouri,1998 ; Asif & Muneer, 2007 ). As a result, global concern over supply and
heavy usage of energy resources has increased (Pe´rez-Lombard et al., 2008).
Therefore global policies are being implemented to invert this trend by increasing
energy efficiency (Asif & Muneer, 2007 ). Authors further pointed out that renewable
energy sources has the potential to provide solution to the global energy challenge.
Figure 2-1 shows the global energy consumption during the last two decades and
expected consumption in the future based on current energy consuming patterns.

Figure 2-1: World Energy Consumption by energy source

Source : (U.S. Energy Information Administration, 2017)

According to the figure 2-1, even by 2040 larger portion of global energy consumptio n
will be fulfilled by petroleum and other liquids, coal and natural gases.

It is important to decide whether Renewable Energy can replace non Renewable

Energy when non Renewable Energy sources depleted. When the rate of increme nt
(gradient of each graph) of each source is compared, it is clear that the renewables and
other sources increase at the same rate (gradient of graphs are almost same). Therefore,

8
renewables would not be able to replace non renewables when non renewables are
getting depleted which can become a serious global crisis. As a solution, it is important
to increase the production and usage of renewables at a much higher rate. Table 2-1
has been prepared based on a latest study by Abas, Kalair, & Khan (2015) and it shows
when non renewable energy sources would get depleted

Table 2-1:Expected energy depletion

Fuels Total Reserves Production/Day End (Date)
Oil 1.689 Tb 86.81 Mb 2066
Gas 6558 TCF 326 BCF 2068
Coal 891.531 BT 21.63 MT 2126

Source: (Abas, Kalair, & Khan, 2015)

According to Abas et al. (2015) there will be an energy crisis within next 50-60 years.
Therefore developing renewables as an alternative has to be initiated from today itself.
Therefore incease in the usage of renewable energies so that it can replace the depleting
non renewable sources has become a global concern to satisfy the increasing Energy
demand of the people

Pe´rez-Lombard et al. (2008) describes, increase in population and increase in the

demand for building services and comfort levels have become reasons for the higher
energy demand. According to Wang (2014) due to urbanisation energy consumptio n
of people has risen. International Energy Agency (2017) states that the total final
consumption by fuel has risen from 4,661 Mtoe in 1973 up to 9,384 Mtoe in 2015
which is 101.33 % increment. According to the statistics of United Nations Department
of Economic and Social Affairs (2017) global population has risen from 3,942 millio n
in 1973 upto 7,334 million in 2015 which is 86.05% increment. Therefore, according
to above statistics Energy consumption by fuel is rising at a higher rate than population
and as a result per capita energy consumption is also rising. Therefore, there is a
requirement of alternative energy source to balance the rising energy demand.
According to Pe´rez-Lombard et al. (2008) renewable energy resources has become a
primary concern for the rising energy consumption.

9
2.3 Energy consumption

According to the data provided by the International Energy Agency, primary energy
consumption has increased by 49% during the last two decades (Kolhe, Ranaweera, &
Gunawardana, 2015). In addition, authors state that the energy consumption is rising
at a rate of 2% per year. Authors further pointed out that, integrating Renewable
energies with the building sector has become a prime objective in the energy policies
at national and international levels

2.3.1 Energy consumption in different types of buildings

Building energy consumption has increased heavily over the last few decades (Cao,
Dai, & Liu, 2016). Authors have further pointed out that growth of population,
increased in time spent indoors, increase in the demand for building services and
indoor environment quality and global climatic changes has resulted buildings to
consume a higher amount of energy. Buildings (both residential and non-residentia l)
consume approximately 40% of global energy consumption, playing an important role
in the global energy market (Nejat, Jomehzadeh, Taheri, Gohari, & Abd. Majid, 2015).
But according to I. Rajapaksha, Jayasinghe, & Rajapaksha ( 2015) both residential and
non residential buildings consume one fifth of total global energy consumptio n.
Building’s energy demand is expected to increase in the coming years (Xing, Hewitt,
& Griffiths, 2011). During the last four decades energy demand of buildings has grown
by 1.8% per year (International Energy Agency, 2012). Further, IEA (Internatio na l
Energy Agency) expect that the consumption will grow from 2790 Mtoe in 2010 up to
4400 Mtoe by 2050. Further they expect that developing countries are expected to
contribute more towards this increment.

2.3.2 Energy consumption in Industrial Buildings

According to the energy statistics energy consumption of industrial buildings has not
been highlighted separately. Energy consumption of industrial buildings forms a part
of the industrial sector. figure 2-2 demonstrate the energy consumption by each sector
separately

10
 1971 2016
4% 3% 8% 2% 2% 8%

38% 37% 22%

24%

23% 29%

Agriculture/forestry Agriculture/forestry
Commerce and public services Commerce and public services
Residential Residential
Transport Transport
Industry Industry
Other Other

Figure 2-2:Total Energy Consumption by sector

Source: (International energy Agency, 2018)

According to figure 2-2 only the transport sector shows an increment of energy
consumption compared to 1971. However, other sectors also do not show a
considerable difference compared to 1971 statistics. Although, industrial sector shows
a percentage of 37%, it does not include only the industrial buildings. Energy
consumed in other industries which are carried out without a building also comes under
this category. However, as the industrial sector consume a substantial energy,
implementing renewable energy for the industrial sector would make a considerable
impact regarding energy consumption. On the other hand, as I. Rajapaksha et al.( 2015)
pointed out buildings consume one fifth of global energy. Considering the statistics on
energy consumption of buildings and industrial sector, integrating renewable energy
for industrial buildings is an important approach which can create a positive impact
for the current energy consuming pattern. Cao, Hasan, & Sirén (2013) who has carried
out a research on energy consumption of buildings, have foundout various applicatio ns
of energy in buildings. Researchers have considered United states, China and
European Union for their study. According to their findings, any building type uses
energy for space heating, water heating, space cooling, lighting, appliances and other

11
equipments. Figure 2-3 shows, industrial energy consumption by various energy
sources

CONSUMPTION (QUADRILLION BTU) 250

200 15
11 12
9
9 9 31
30 32
150 28 Renewables
8 24 24
20 Electricity
50 55
100 56 Coal
52 58
56 Natural gas
46 44
35 40 45 Liquids
50 26 32 35

36 40 41 45 45 50 56
0
2010 2015 2020 2025 2030 2035 2040
YEARS

Figure 2-3:Energy consumption by different forms of energy

Source: (U.S Energy Information Administration, 2016)

According to figure 2-3 portion of renewable energy usage is comparatively low. It is

not expected to show a substantial increment in upcoming years as well. Therefore
using renewable energy in the industral sector is important. Apart from that, electric ity
consumption is expected to increase from 20 upto 32 quadrillion BTU. Therefore,
using more renewable energy to generate electricity in the industrial sector is also
important. Examining the possibility of using renewable in large scale out of the site
premises and within the site premises to generate electricity is important for industr ia l
buildings

2.4 Electricity generation

Electricity has the ability to improve the life style of people by developing the level of
health, education and technology (Javadi, et al., 2013). Nearly two third of global
electricity generation depend on fossil fuels (Ang & Su, 2016). Authors further state
that using fossil fuel contribute to CO 2 emissions. Elaborating the view Dresselhaus &

12
Thomas (2001) state that using fossil fuels emit not only CO 2 but also other
contaminants such as oxides of Nitrogen, oxides of Sulphur and ash. Authors further
state that man kind is facing resource limitation due to resource depletion. According
to Ang & Su (2016) increase in the demand of electricity is higher than the demand
for primary energy in most of the countries. Because of the environmental impact fossil
fuel create , resource limitation of fossil fuels and due to the rising demand for
electrical energy there is a global need of an alternative source to generate electric ity.
Figure 2-4 shows contribution of energy sources towards generating electricity

100% 3 3 3.5 3 1 1 1
11 11 11
90% 12.5 12.5 12
15
SHARE OF ELECRICITY GENERATION

80%
70% 20 20 24
22 22.5 26 27
60%
50%
40%
34 31.5 30
38 37
30% 40
40
20%
10%
20 22 26 28 30 30.5 31
0%
2010 2015 2020 2025 2030 2035 2040
YEARS

Renewables Coal Natural gas Nuclear Liquids

Figure 2-4: Share of net electricity generation

Source: (International Energy Agency, 2017)

According to figure 2-4 coal and liquid based resource usage is expected to be declined
while the renewable portion is expected to be increased in the future. Renewable
energy sources such as solar, wind, biomass, geothermal can be used to generate
electricity (Bull, 2001).

2.5 Electricity Usage in Industrial Buildings

It is important to recognize the electricity usage in industries to relate the significa nce
of electricity to the industrial sector. Figure 2-5 demonstrate the electric ity
consumption in each and every sector

13
 45

40

Electricity use (Quadrillion BTU)

35

30

25 Industrial

20 Residential
Commercial
15
Transportation
10

0
2010 2015 2020 2025 2030 2035 2040
years

Figure 2-5:Total final Electricity consumption by sector

Source: (International Energy Agency, 2017)

According to figure 2-5 electricity usage is higher in the industrial sector when
compared with other sectors. According to the current consuming patterns, industr ia l
sector would be the highest electricity consumer by 2040. Therefore, using renewable
sources to generate electricity in the industrial sector would make a significant impact
to the overall electricity consumption and it would make a considerable impact to the
resource depletion and environmental impact reducing policies.

2.6 Renewable energy

2.6.1 What is renewable energy

According to IEA (2013) renewable energy is the “energy derived from natural
processes (e.g. sunlight and wind) that are replenished at a faster rate than they are
consumed”. Bull (2001) describe renewable energy as self-renewing energy sources.
Renewable energy sources were used as primary energy during the ancient times
(Edinger & Kaul, 2000). In addition, authors state that wood was used for cooking,
heating space and water. Authors further state that, during last 200 years, due to
industrialisation countries shifted towards fossil fuel which have a higher energetic
value. Oil and coal were used for generating electric power which are considered as

14
non-renewable energy sources (A.Demirbas, Sahin-Demirbas, & Demirbas, 2004). In
addition, today efficient and cost effective renewable energy generation is available in
small scale. Further the share of renewable energy sources is expected to increase
significantly. Further authors state that hydropower and biomass already fulfilling upto
18% of the global energy requirements (A.Demirbas et al., 2004). Importance of
fulfilling the energy requirements has been expressed by scientists and societal groups
(de Vries, Vuuren, & Hoogwijk, 2007). Further author pointed out that importance of
renewable energy has risen due to several reasons such as depletion and increase in
price of conventional energy sources, unfavourable impact on climate and the air
quality due to usage of fossil fuels and lack of reliability in energy supply. Using
Renewable Energy delivers many long term benefits such as creating jobs and business
opportunities, energy security, prevention of global warming and contributing to
sustainable development (Tükenmez & Demireli, 2012).

Main limitation of using renewable energy is inability to generate power consistently

due to its intermittent nature (Khan & Iqbal, 2005). Therefore, energy storage is a
critical factor in renewable energy systems to produce and supply renewable energy in
a consistent basis

2.6.2 Renewable energy sources

According to Bull (2001) renewable energy sources are available throughout the
world. But author state they are not distributed uniformly. According to the author
although the resources are not distributed uniformly almost every region has at least
few sources available. Author point out that it is important to use renewable energy in
your country to fulfil your requirements rather than depending on energy sources of
other countries or regions. Table 2-2 shows the relevant authors and the identified
renewable energy sources in their studies

15
Table 2-2:Renewable energy sources

Koroneos, Spachos, & Moussiopoulos, 2003

Suarez, Beaton, Faxas, & Luengo, 2016

Jamil, Kirmani, & Chatterjee, 2014

Panwar, Kaushik, & Kothari, 2011
Daim, Harell, & Hogaboam, 2012
Abdelhamid & Bahmed, 2011

Kozlovski & Bawah, 2015

A. Demirbas et al., 2004

Yazdi & Shakouri, 2017

Kulkarni & Anil, 2018
Fridleifsson, 2001

Mohanty, 2012

Froome, 2010

Castillo, 2017
Bull,2001
Solar             
Wind               
Geothermal         
Biomass             
Nuclear  
Hydro        
Wave   
power

Based on the above studies, identified renewable energy sources are Solar power,
Wind power, Geothermal, Biomass, Nuclear power, Hydro power and Wave power.
Nuclear power and wave power are not identified by most of the studies. Out of the
identified renewable sources wind power has been identified in all the above cited
works. Solar power and biomass are also prominent according to the above table.

2.6.3 Solar Power

Solar energy is the energy radiated from the sun (Abdelhamid & Bahmed, 2011).
Further this solar power is transformed into electricity or thermal energy. In addition,
solar power is pollution free renewable energy source. According to Panwar et al.
(2011) Solar energy is the most abundant renewable energy source and can be obtained
in both direct and indirect forms. In addition, there is a wide range of solar energy
applications such as water heating, cooking and crop drying. There are rural areas
which do not have electrical power, but solar energy can be obtained in plenty

16
(Demirbas, 2007). Therefore solar power is a good renewable source in rural
electrification.

Converting Solar Energy to electrical energy is done using photovoltic cells (Panwar
et al., 2011). In addition, PV cells generate electricity without making any noice,
vibration or emission. Authors further state that although Sunlight is freely availab le,
power generation cost is extremely high. Ruangpattana, Klabjan, Arinez, & Biller
(2011) state a contradictory view stating that cost of renewable energy generated by
solar power is declining at present due to the technological advancement. Another
issue of using solar power is solar energy has low energy density and PV cells should
have a large surface area for a small power generation (Topcu & Ulengin, 2004).
Primary equipment of a PV system is the inverter (Panwar et al., 2011). Author further
state that function of inverter is to convert DC power into AC power. Ruangpattana et
al. (2011) mention several technological advancements in the solar power generation
such as using silicon based cells and semi conductor based cells which use nano –
structure materials. Solar power cannot generate power at night which can be
overcome by using wind power (Demirbas, 2005).

2.6.4 Wind Power

Using wind energy has become a pollution free and widely used technology in most
of the countries around the world (Balat, 2009). Wind power is the power generated
by converting wind energy into a useful form of energy (Abdelhamid & Bahmed,
2011). Further according to authors rotating wind mills to generate electricity or
mechanical energy can be mentioned as example.

Power generation based on Wind power is increasing rapidly (Balat, 2005). Author
further state that wind power has become an attractive source because it can be
obtained in plenty, well distributed and not producing greenhouse gases. Author
further point out that due to the visual impacts and other environmental impacts,
construction of wind farms is not environmentally accepted. Advantage of using wind
power over solar power is, wind systems can generate power even during night time
(Demirbas, 2005). According to Duffie & Beckman (2013) difficulty in extending
power lines to a low-populated area can be overcome by using wind energy as it can

17
be utilised as an independent source. In addition, wind power contributes in reducing
atmospheric degradation. A substantial capital is required to construct and install a
wind farm (Ruangpattana et al., 2011). Authors further state that total investment cost
include land, peripherals, equipment and legal process fees. In addition, wind energy
costs are expected to decrease due to technological advancement. Globally, there is a
limitation in extending power lines to rural areas where a huge energy loss would occur
(Koulagi, Hosmath, Madival, & Revankar, 2016). Authors further pointed out that on
site wind power generation is an alternative to the above issue. Jia, et al., (2014) have
sated that a building is also a micro grid and a suitable test bed for smart grid
technologies. Authors further state other than photovoltic panels, on site wind power
is used to develop smart grid in both residential and commercial buildings.

2.6.5 Hydro Power

The technology of capturing and converting water in rivers and streams into
hydropower, also called hydroelectric power (Demirbas, 2005). Both large and small
scale hydro power is the most important of the Renewables in generating electrical
power in the world (Paish, 2002). As a Renewable Energy source the potential of hydro
power in generating power should be examined in an environmentally sustainable and
socially acceptable manner, minimising the over extraction of water for generating
hydro power (Omer, 2013).

Small – scale generation of hydro power is one of the most cost effective ways of
generating power for the electrification of low developed countries (Paish, 2002). On
the other hand, author state that small scale hydro plays an important role in developing
hydro based power generation in the Europian world because large scale power
generation opertunities are already exploited or they are not environmenta lly
sustainable. In addition small scale hydro power generation systems are extremely
durable and environmentally sustainable.

In the 20th century, hydro power generation was based on constructing artificial lakes
by building large dams (Paish, 2002). Further building of artificial lakes enables a
reliable power supply and support in controlling irrigation and flood. Figure 2-6 shows

18
the potential of generating hydro power in different regions of the world in technica l,
economic and exploited aspects

8000

7000

6000

5000

4000

3000

2000

1000

0
Africa Asia Australia Europe North and South America
Central america

Technical potential Economic potential Exploited potential

Figure 2-6:Potential of generating hydro power

Source: (Fraenkel et al., 1991)

According to Fraenkel, et al., (1991) Asian countries has the comparatively the highest
potential in generating hydro power in all three technical, economic and exploitatio n
aspects.

2.6.6 Biomass

Power can be generated from biomass resources which has a wide range starting from
agricultural and forest product wastes up to crops grown specially for generating power
(Bull,2001). Describing the process of generating power, author state that the biomass
is burnt to produce steam and steam is expanded by a turbine to generate power. Using
biomass can be considered as one of the most energy-efficient and environmenta lly
beneficial technology for bioenergy generation (Weiland, 2010). According to
Abdelhamid & Bahmed (2011) mainly there are three sources of biomass. According
to authors, first source is wood which is three quarters of the total production of forest.

19
Second category is waste which include domestic, industrial, urban and animal waste.
Third category is liquid fuels extracted from materials such as oil, starch, sugar and
beet. According to Abdelhamid & Bahmed (2011) biomass can be either burn, rotten
or chemically transform so that it produce heat. Biomass has been identified as a
prominent renewable energy source which can be generated on site among other
renewable sources (Ruangpattana et al., 2011).

2.6.7 Other renewable energy sources

Geothermal energy is another renewable energy source which is produced by dry

steam, hot water, hot dry rock, magma, and ambient ground heat (Bull, 2001). Author
further state that steam from water resources and ambient ground heat are
commercially developed to generate power. Wave power is also another renewable
source available for power generation (Salter, 1974). In addition author state that
potential energy in the waves, turn into kinetic energy when wave is falling into the
trough which can be used to generate power. Nuclear power has been identified as a
renewable energy source by A. Demirbas et al. (2004) and Koroneos et al. (2003)
according to the table 2.2 above. But Bertani (2005) present a controdictory oppinion
stating that although nuclear power can be used as a substitute for fossil fuel, it cannot
be considered as a pure renewable sources. On site renewable energy generation is an
option for growing energy demand (Bhanware, Reddy, Maithel, Ravi, & Kumar,
2017).

2.7 Onsite Renewable Energy generation

2.7.1 What is on site renewable energy

Mainly there are two options available for supplying energy as on-site and off-site
(Marszal & Heiselberg, 2011). Authors further state that currently, on-site options are
more popular. On site renewable energy refers to energy generation attached to the
building (Australian Building Codes Board, 2016). Marszal & Heiselberg (2011)
also categorize the renewable energy into two as on site and off site based on the
location where the system has been installed. Torcellini et al. (2006) also use the same
terminology but the categorisation was done based on the origin of the source not based
on location of the renewable energy system. Marszal & Heiselberg (2011) describe

20
solar power as the most commanly used on site renewable energy source. In addition
authours have identified biogas and biomass as renewable sources which are
applicable on site for heat and power generation. Ruangpattana et al. (2011) has
pointed out the possibility of selling additional power generated by on site renewable
energy systems to gain an additional advantage. On the other hand, Dufo-Lo´ pez,
Bernal-Agustı´n, & Contreras (2007) has analysed the possibility of using excess
renewable energy generated using on site methods for charging battaries and produce
hydrogen in the electrolyser. U.S. Environmental Protection Agency (2014) has
pointed out the possibility of implementing on site renewable energy in the rural areas
by the local governments. In addition, under their report they have hilighted the energy,
environmental and social benefits that can be achieved by extracting power through
renewable energy sources. Net zero energy buildings is a relatively new and
developing topic in the field of energy (Cao et al., 2013). In addition authors further
state that developing on site renewable energy significantly create an impact in
reaching net zero energy goal. Cao et al. (2013) pointed out that fulfilling the expected
energy requirement continuously with intermittent renewable energy sources using on
site technologies is a challenge. Ruangpattana et al. (2011) state that expected
regulatory compliance such as carbon emission regulations and electricity price risk
has become global restrictions in developing on site renewable energy systems.
Authors further state that relatively limited work exist in the literature relevant to on
site renewable energy generation, hilighting the importance of more research in the
selected area. Table 2-3 summarise the on site applicability of renewable energy
sources

21
Table 2-3:On site renewable energy

References

Demirbas, 2007

Bhanware et al., 2017

Board, 2016
Australian Building Codes
2016
Shukla, Sudhakar, & Baredar,

Tassou, 2012
Panayiotou , Kalogirou, &

Duffie & Beckman, 2013

Bahaj, Myers, & James, 2007

Bošnjaković, 2013

Ruangpattana et al., 2011

Huang, et al., 2011

Vitidsant , 2009
Pipatmanomai, Kaewluan, &

Whiting & Azapagic, 2014

Renewable
energy sources

Solar     
Wind     
Biomass     

According to table 2-3, solar, wind and biomass are the only renewabl sources that can
be used within building premises as renewable energy sources in the global context.

2.8 Renewable Energy generation in Sri Lanka

Sri Lanka is considered as a lower middle income country with a growing economy
(Ministry of Power & Renewable Energy, 2015). Renewable energy supply has the
ability to support in mitigating poverty (Mazhar, Ikram, & Choudhry, 2013). Therefore
adequate energy supply is an important aspect in a developing country (Morimoto &
Hope, 2004). The role of Renewable Energy in a developing country cannot be
ignored (Mazhar et al.,2013). Table 2-4 shows the different methods of energy
generation in Sri Lanka

Table 2-4: Energy generation in Sri Lanka

Power generation procedure Description Generation

(GWh)
Through Ceylon Electricity Hydro 2,921
Board Thermal - Coal 3,336
Thermal - Oil 1,462
Non-conventional Renewable Energy (Wind) 1

22
 Power generation procedure Description Generation
(GWh)
Through Private Power Hydro 604
Procedures Thermal 862
Non-Conventional Renewable Energy (Except 294
Small Hydro)
Total 8,718

Source: (Ministry of Power & Renewable Energy, 2015)

According to Ministry of Power & Renewable Energy (2015) more than 50% of power
is generated by fossil fuel in Sri Lanka. However, during the dry season, this
percentage rise up to 70% due to the decrease in hydropower generation (Kolhe et al.,
2015). Therefore there is a need of increasing the power generation capacity in Sri
Lanka (De Silva & Sandanayake, 2012). As a solution there is a requirement of shifting
towards renewable energy sources to fulfill the rising energy demand in Sri Lanka
(Mendis, Waidyasekara, & Ekanayake, 2017).
As Sri Lanka is an island with abundant sunlight throughout the year and having wind
resource adequate for fire generation, Sri Lanka is an ideal place for generating
renewable energy (Ministry of Power and Renewable Energy, 2013). According to the
statistics provided by the Ministry of Power Renewable Energy (2013), Sri Lanka
power generation consists of 40.5% of hydro power, 49% of thermal power and 10.5%
of renewable energy. In addition, renewable power consists of solar, wind, bio-energy
and mini hydro. However, the percentages given above vary during the dry season and
thermal power generation rises up to 70% (Kolhe et al.,2015). Authors further state
that as Sri Lanka does not have any fossil fuel resources therefore renewable resources
are the most viable resource type for the Sri Lankan context.

Sri Lanka expecting to achieve 100% electrification during the next few years
(Ministry of Power and Renewable Energy, 2013). Further to achieve the objective
new power plants and grid expansions have been proposed. Ministry of Power and
Renewable Energy (2013) further state that out of the proposals, government has paid
their attention towards increasing the non conventional renewable energy portion from
4.1% in 2007 to 20% in 2020. According to Kolhe et al. (2015) off grid renewable

23
energy has a vital role to play in achieving the 20% power generation using renewable
sources.

2.9 Life Cycle Cost

2.9.1 What is Life Cycle Cost

Initial cost is the most commanly used criteria and sometimes the only critera used
when investment decisions are made by the investors (Jakob, 2006;Woodward, 1997).
Jakob (2006) further state that, if energy systems are considered, they consider cost for
designing, equipment and energy systems, neglecting future operational costs. As a
result of not having a comprehensive cost approach, Employers are unable to select
the most cost effective investment (Marszal & Heiselberg, 2011). On the other hand,
due to the rising inflation, reduction in purchasing power, limitations in budget and
rising competition has created an interest in the cost of products, systems and structures
(Durairaj, Ong, Nee, & Tan, 2002). Authors further state that not only the acquisitio n
cost but also environmental management systems and quality management systems
cost also taken into consideration when deriving the Life cycle Cost.

“Life Cycle Cost represent the economic aspect of sustainability” (Charles,

Jeyamathan, & Rameezdeen, 2008). Durairaj et al. (2002) defines Life Cycle Costing
as“systematic analytical process for evaluating various designs or alternative
courses of actions with the objective of choosing the best way to employ scarce
resources”. According to Woodward (1997) Life Cycle Costing focus on optimis ing
the value for money due to the ownership of a particular physical asset, considering all
cost factors related to the physical asset. Life Cycle cost can be described as total
discounted cost of owning, operating, maintaining and disposing of a building over a
period of time (Department of Education and early development, 1999). In addition,
Life Cycle Cost Approach (LCCA) can be implemented at any stage for evaluating
cost of the buildings.

2.10 Evaluating Life Cycle Cost

Korpi & Ala-Risku (2008) describe Life Cycle costing as an approach designed for the
evaluating of procurement purposes. According to Ellram (1995) Life Cycle costing

24
focus on fixed assets. Asiedu & Gu (1998) state that Life cycle Costing can be used
for any product. Life Cycle Cost of a product can be derived following many
approaches (Durairaj et al.,2002). Korpi & Ala-Risku (2008) has analysed fifty five
LCCA studies and provided a comprehensive categorisation of various LCCA studies
based on various parameters as given in table 2-5

Table 2-5: LCCA classification

Item Classification Based on

Industry
Public sector influence
Perspective of the analysis
Nature of the product
Purpose of the analysis
Life Cycle phases
Information sources
Cost estimation methods
Nature of the analysis
Construction SIC divisions (US
Transportation Department of
Manufacturing Labor,2006), with two
Energy alterations
Research
Real Estate
Public Woodward (1997)
Private
Manufacturer Fabrycky and Blanchard
Client (1991) vs Dunk (2004)
Other
Continuous production Our own classification,
Recurring Investments inspired by Asiedu and Gu
Unique investments (1998)
Affordability studies Barringer and Weber
Source selection studies- vendor (1996), with two
Source selection studies- product alterations
Design trade offs - optimisation
Design trade offs – comparison
Repair level analysis
Warranty and support costs
Supplier’s sales strategies
Research and Development Fabrycky and Blanchard
Production and construction (1991)
Operations and maintenance
Retirement and disposal cost
Public statistics Korpi & Ala-Risku (2008)
Internal sources
Other firms
Other articles
Other sources
Information sources not reported
Estimating by Engineering procedures Fabrycky and Blanchard
Estimating by analogy (1991)
Parametric estimating
Stochastic

25
 Item Classification Based on
Deterministic Fabrycky and Blanchard
(1991) and Emblemsvag
(2001)

Source : (Korpi & Ala-Risku, 2008)

According to table 2-5, LCCA can be applied to various industries. Construction

industry and energy industry which are relevant to the selected research area are also
among those industries. LCCA can be carried out either for the public or private sector.
This research was carried out for private buildings. LCCA can be conducted in
manufacturere’s, client’s or other perspective. This research intends to provide a
decision making tool for the clients or the building owners to select a suitable
renewable energy system or a combination of systems for their industrial buildings .
Therefore, study was carried out in client’s perspective. Investing on, on site renewable
energy systems is a unique investment. Moreover, this is a source selection study
where a product would be selected. This study focus on the operational phase of the
buildings as mentioned under 1.6. Therefore, construction of the developed renewable
energy systems and the associated operational and maintenance stages are the life cycle
phases related to this study. Opinion of experts and document analysis would be used
as the information sources as mentioned in 1.5. According to table 2-5, cost estimatio n
methods are of three types as estimating by engineering procedures, estimating by
analogy and parametric estimating. Engineering procedure is the widely spread
method where estimating is carried out based on detailed information of the product
and process (Sarhan Al-Zwainy & Hadal, 2016). Authours further defines analogy
method as method of comparing the current project with a completed project for
calculating the LCC. In addition, in the parametric method cost is estimated based on
various parameters such as mass, volume and energy absorbed. Estimating by
Engineering procedures was used for this study. Nature of the research is not
deterministic, it is stochastic as the research outcome were followed with a sensitivity
analysis. Fabrycky and Blanchard point out the Stochastic nature or the uncertinity of
Life Cycle studies and suggest to carryout sensitivity analysis to cope with the
uncertinity. LCCA considers future costs (Korpi & Ala-Risku, 2008 ). Therefore

26
authors state that future cost components should be discounted to present value in order
to make relevant recommendations. Therefore, in order to over come the stochastic
nature, future costs were discounted and research outcome were justified by a
sensitivity analysis. Figure 2-7 demonstrate the LCCA approach to be followed

Stochastic
Energy
Private

Estimating by Client
Engineering
Procedures LCCA
Approach Unique
Investment
Other
Resources
Source
Construction & selection
Operation & studies- product
Maintenance

Figure 2-7:LCCA Approach

2.11 Cost components of Life Cycle costing

Durairaj et al. (2002) specifying the objective of Life Cycle Costing states that Life
Cycle Costing Analysis intends to develop a decision making tool to evaluate the cost
of desgning, developing, producing, using and disposing of a product, system or a
structure with the intension of reducing the total cost. Therefore, it is clear that cost
elements of LCCA are derived based on the Life Cycle stages. Table 2-6 presents the
identified cost elements in previous studies and the content of each cost element which
are important in carrying out a LCC analysis.

Table 2-6:Cost elements of energy systems

Reference Identified Cost Elements Content

(Das, P.K Sadhu, Initial Capital Cost Cost of procuring equipment
Chakraborty, Saha, & Sadhu, Recurring or regular cost Cost of Maintenance, supervision and
2015) overall system management

27
 Reference Identified Cost Elements Content
Non-recurring or Cost of substituting new components
replacement cost
(Liu, 2017) Equipment
Manufacturing Cost
Cost of system
construction
Cost of system operation
(Hoar, 1988) Initial Costs Include land acquisition cost,
construction cost, professional fees,
equipment cost and commissioning
Annual Costs Include Energy, cleaning, insurance and
annual maintenance costs
Intermittent Costs Maintenance cost
(Ma, Yang, & Lu, 2014) Initial Costs
Operation, maintenance
and repair costs
Replacement costs

This research focus on electrifying existing industrial buildings using on site

renewable energy in the operational and maintenance stage of the building and the
monetary benefit it would deliver. According to the cost elements identified in the
above table 2-6, initial construction cost, maintenance cost and replacement cost can
be considered as applicable basic cost elements for the selected research area which
are highlighted in table 2-6. It is important that the on-site renewable energy generation
is economically attractive (Kolhe et al., 2015). Authors further state that renewable
energy source, initially selected components and their capacity has a great impact on
the cost. Adding more facts to the designing aspect Kolhe et al (2015) state that life
time and affordability by the customers is important to be considered when designing
renewable energy systems. Chel, Tiwari, & Chandra (2009) suggest that LCC has to
be calculated based on the specifications of each component of renewable energy
system

2.12 Need of Identify benefit gained by using onsite renewable energy by using
LCC concept

Life Cycle Cost Analysis for Renewable Energy systems and cost efficie nc y
approaches have been addressed by previous researches. Kale et al., (2016) has
conducted a research on Life Cycle Cost Analaysis of Commercial Buildings with
Energy efficient approach. Under that research, Renewable Energy usage has been

28
identified as a part of energy efficient approach, but LCC of using Renewable Energy
sources have not being seperately analysed. Kolhe et al (2015) have carried out a LCC
analysis and technological analysis for a off-grid hybrid (solar and wind) renewable
energy system which is supposed to be used for rural electrification in Sri Lanka. This
research has considered the residential sector selecting 150 house holds in a rural
village in siyambalanduwa for the study. Chel et al. (2009) has conducted a LCCA for
building integrated photovoltic system applied for a residential building. Dones &
Frischknecht (1998) has done a LCCA on stand alone photovoltic system. Non of the
studies that have been done on photovoltic systems for industrial buildings. Marszal et
al. (2012 ) has done a research on finding the best cost optimal mix of on site and off
site renewable energy by doing a LCCA for a net zero energy building where energy
efficiency precautions have been taken. Mekhilef, Saidur, & Safari (2011) conducted
a research on solar energy use in industries. Under that research they have identified
various uses of solar energy in industries such as heating, electricity generation, solar
refregireation and solar desalination but cost and monetary benefit has not been
addressed by that research. Chinese & Meneghetti (2005) and Michopoulos, Skoulou,
Voulgari, Tsikaloudaki, & Kyriakis (2014) has carried out their research on using
biomass for heating purposes in various industries. Samarasiri, Samarakoon,
Rathnasiri, & Gunawardena (2017) has carried out a research on the cost of generating
electricity using municipal waste. That research focused on offsite generation of
electricity using municipal waste and supplying it to the national grid. Sunderland,
Narayana, Putrus, Conlon, & McDonald (2016) have conducted a research on the cost
of energy associated with micro wind generation. That research focused on offsite
micro wind generation. On site small scale electricity generation by using renewable
energy in industrial buildings has not been addressed by any of the research yet. This
research attempts to fulfill that existing research gap

2.13 Theoretical model

Main objective of theoretical model is to provide a graphical relationship of the

literature findings and showing the aim and objectives of the research indicating what
has been collected through literature and what are the aspects that has to be covered
through data collection and analysis. According to table 2.2 renewable sources have

29
been identified. Ministry of power and Renewable energy (2015) has stated the
renewable energy sources that have already been applied in the Sri Lankan context.
According to figure 2.3, electricity is the major form of energy consumed in a
commercial building. Life Cycle Costing play an important role in making investme nt
decision on energy systems (Marszal & Heiselberg, 2011). Life cycle Costing has been
described in various ways. Definition of Woodward ( 1997) has been included in the
research. Marszal & Heiselberg (2011) has described on site generation as an emerging
trend in the renewable energy technologies. Marszal & Heiselberg (2011) has
categorised on site renewables and off site renewables based on the location of the
renewable energy system while Torcellini et al. (2006) has categorised based on the
location where the source has origin. Cost components have been identified based on
previous research. Additional cost components of each renewable energy source
should be identified and followed by LCCA to evaluate the cost benefit. Figure 2-8
demonstrate the theoratical model which summarises the literature aspects that have
been described in the literature review.

30
 Decide whether
Applicability to Sri benefit is Financial
Lankan Industrial DPV/Pay or other (Research
Factors to be considered, opportunities, benefits, buildings (Research
limitations (Research Gap) back Gap)
Gap) Period

Biomass On site Evaluating Cost

Onsite Renewable Investment decision
generation (By a
energy sources??? making based on…. benefit gained by
system attached
using on site
Wind to the building
site) renewable energy
systems in
Solar Offsite Life Cycle Cost
generation Industrial buildings
(LCC)
(Research Gap)

Renewables Electricity
Concept of Life Cycle Cost components of
Cost renewable energy
Liquids systems
Life Cycle Costing focus
on optimising the value  Initial Cost
Coal Natural gas  Operation &
for money due to the
Energy ownership of a particular Maintenance cost
consumption in physical asset,  Replacement cost
industrial considering all cost Additional Cost
sector buildings factors related to the components
physical asset (Research Gap)

Figure 2-8:Theoretical Model

31
2.14 Summary

Renewable energy sources have been identified as the source with the higher potential
to face global energy crisis. On site renewable energy generation is emerging as a new
energy concept. Using renewable sources in industrial buildings is low compared to
other energy sources. Therefore, integrating renewable sources with industr ia l
buildings is important. On the other hand, a considerable portion (15%) of energy is
used in the form of electrical energy in industrial buildings. Therefore, using renewable
energy for electrification of industrial buildings is more important. Investing on
renewable energy is not suitable to do by considering only the initial construction cost
ignoring future benefits and additional cost components. Initial cost, energy cost,
maintenance cost and replacement cost can be identified as basic cost components.
LCCA of Solar PV systems as an onsite renewable energy option have been subjected
to previous studies. However, application of solar PV and other renewable energy
sources has not yet subjected to scientific researches.

32
 CHAPTER 03
3.0 RESEARCH METHODOLOGY

3.1 Introduction

In the second chapter, literature was reviewed, addressing all aspects of the research
topic with the available literature. Research methodology is a way to solve the research
problem scientifically (Kothari, 2004). In this chapter, research design, research
approach, research methods and data analysing techniques are described which are
required to achieve the aim and the objectives of the research.

3.2 Research Design

Research design specifies, research approach and research techniques in a collective

manner so that the aim and objectives of the research are achieved (Maxwell, 2004).
Describing the research design more comprehensively, Kothari (2004) states that
research design is the systematic way of conducting a research and outlining the data
collection, measuring and analysing. Author further state that, research design should
be decided in a way that maximum amount of information collected with a minimum
effort, time and money. Main sections which form the research design are described
below.

3.3 Research Approach

Research approach has been describrd by Thurairajah, Haigh, & Amaratunga (2006)
as a procedure of organising research activities and integrating data collection so that
the objectves and aims are achieved.

3.3.1 Available research approaches

Approach for a research should be selected based on the research problem (Borrego,
Douglas, & Amelink, 2009). Authors further state that there are three research
approaches namely, quantitative, qualitative and mixed.

Quantitative approach is a statistical approach to the research design (Williams, 2007).

Describing the process of a quantitative research, Leedy & Ormrod (2010) state that
“Quantitative researchers seek explanations and predictions that will generate to other

33
persons and places”. The intent is to establish, confirm, or validate relationships and
to develop generalizations that contribute to theory.

According to Williams (2007) unlike the quantitative approach, qualitative approach

is a holistic approach. Author further state that qualitative approach builds on inductive
reasoning rather than deductive reasoning. According to Leedy & Ormrod (2010)
qualitative research is describing and interpreting collected data. Qualitative research
enable researcher to develop details by highly involving in the actual experience
(Creswell, 2014). Williams (2007) hilighting the difference between quantitative and
qualitative approaches, state that in qualitative approach researcher and phenomina is
having a strong correlation while in the quantitative approach researcher and
phenomina having a poor correlation. When both quantitative and qualitative
approaches are incompatible and associated methods cannot be mixed, a mixed
approach is applicable (Johnson & Onwuegbuzie, 2004). In a mixed research approach
researchers collect data in both qualitative and quantitative approach in a single
research (Creswell, 2014 ; Johnson & Onwuegbuzie, 2004). Johnson & Onwuegbuzie
(2004) further describing the mixed approach state that mixed approach is not a
replacement for the quanitative and qualitative approaches but an extension of both
approaches.

3.3.2 Selected Research Approach for this Study

This research intends to evaluate the cost benefit gained by using on site renewable
energy for the electrification of industrial buildings based on Life Cycle Costing,
following a qualitative approach. As Creswell (2014) described qualitative approach
enable researcher to highly involve in the scenario to collect data. Harrison, Lin,
Carrol, & Carley (2007) describe that qualitative research is best suited in developing
theoratical ideas. Qualitative research mainly focus on exploring and clarifying
situations and experience of people (Kumar, 2011). Qualitative approach is a
subjective approach where you relie on individual’s interpretation on the event
(MacDonald & Headlam, 2011). Authors further state that outcome of a qualitative
research is presented in words, pictures or objects.

34
For this research it is required to collect data regarding renewable energy applicable
onsite, criteria you should consider in applying renewable energy onsite, opportunities,
limitations, benefits you can obtain and cost components that should be considered in
deriving the Life Cycle Cost. Exploring the onsite applicability of renewable energy
and associated cost components highly depend on subjective matter. In addition,
calculating Life Cycle Cost of renewable energy options, will be carried out based on
information provided by professionals in the selected cases and available documents.
It is clear that research depends on the subjective matter. Therefore, qualitative
approach is suitable for this study.

3.4 Available Research Methods

Research method depend on the research approach you select based on research
problem (Greener, 2008). Creswell (2014) identifies research methods in his study
namely, preliminary interviews, expert interviews, case study, questionaires and desk
studies. Cohen, Manion, & Morrison (2007) present a slightly different categories as
surveys, case studies, questionaires, experiments and interviews.

3.4.1 Expert Interviews

Cohen et al. (2007) describe interview as an interchange of views between two or more
people. Authors further state that purpose of interview is to gather data to build or test
hypothesis. Interviews are considered as one of the best option for data collection as
it goes up to the depth of opinion of the interviwee (Punch, 2014). On the other hand,
expert interviews are best suited to extract the data through the experience of the
interviewee (Fellows & Liu, 2015). Therefore expert interviews are best applicable to
find out renewable energy sources applicable on site to the Sri Lankan context, criteria
of using onsite renewable energy sources, opprtunities, limitations and benefits of
applying on site renewable energy and the cost components that has to be considered
to collect information to proceed with the case study. Semi structured interviews were
carried out to extract relevant information from the experts. Expert interview guideline
has been given in Appendix B

35
3.4.2 Case Study

Fellows & Liu (2015) describe case study as “ A detailed study of a single individ ua l,
group/organisation, event/project or process”. Case study is identified dominantly as a
qualitative research method (Kumar, 2011). In case studies, data can be collected
through interviews, questionaires, reports and archival records (Fellows & Liu, 2015).
Authors further state that cases should not be selected randomly, cases should be
selected in a way that the researcher could extract maximum information.

In this research two interviews and document analysis were used to collect data
required for the case studies. Three industrial buildings were selected for each on site
applicable renewable energy source. Each case study was carried out based on
interviews and analysing available records and documents related to each case. Case
Study guideline has been given in Appendix C

3.5 Data analysis techniques

Collected data was analysed in rder to make relevant recommendations (Cohen et al.,
2007). In this research expert interviews and case studies are used as data collecting
methods. Therefore data analysis of expert interviews and questionaires are discussed
below.

3.5.1 Analysing expert interviews

In this research qualitative data is collected by expert interviews. Qualitative data

analysing involves organising, explaining collected data in short and making sense of
the collected data (Cohen et al., 2007). Authors further state that seeking causalities,
exploring and raising questions also play a part of analysing qualitative data.
Analysing collected qualitative data from expert interviews can be analysed using
content analysis. According to White & Marsh (2006), content analysis is a technique
which produce a replicable interfence. Therefore, a content analysis gives outcome
which can be prooved repetitively and it allows to reach a conclusion with proper
evidence and reasoning. For this study, content analysis has been done manually to
extract the opinions and justifications of the interviewees of expert interviews.

36
3.5.2 Analysing Case Study

Main focus of carrying out case study is to identify more cost elements and relevant
cost of identified cost elements related to onsite renewable energy sources which are
being used for the electrification of industrial buildings. Life Cycle Cost is calculated
based on the identified life cycle phases through literature and cost components
identified through expert interviews and case studies. For calculated Life Cycle Cost,
analysing has to be done after discounting (A. Atmaca & Atmaca, 2016). Authors
further describe the equation that can be used to derive the discounted Life Cycle Cost
as follows

𝐹𝐶
𝐷𝑃𝑉 = (Source: A. Atmaca & Atmaca, 2016)
(1+𝑑) 𝑛

(DPV = Discounted Present Value, FC = Future Cost, d = discount rate, n = number

of years)

Payback period is also another important criterion to analyse the outcome of case
studies. According to Boardman, Reinhar, & Celec (1982) payback period is a
guidance to decide the rapidity of covering the initial capital outlay. Authors further
pointed out that based on the recovery period, it is possible to decide on the acceptance
of an investment project. On the other hand, this research is stochastic as mentioned in
2.9. There is a requirement in conducting a sensitivity analysis to reduce the
uncertainity of the research findings. According to Tian (2013) by varying the input
change in the range of output can be decided. In this research variable factors were
identified through renewable energy developers and reasonable changes were made to
decide the variability of LCC, payback period and the cost benefit each energy system
would deliver

37
3.6 Research Process

Figure 3-1 demonstrate the research process that was followed in order to achieve the
aim and objectives of the research

Back ground study (Global energy usage,

energy crisis and importance of renewable
energy )

Identify Research Problem (benefit of us ing onsite renewable energy

systems for electricity generation in industrial buildings

Objective 1
Literature Review (renewable
energy sources, on site applicability
Objective 3 of renewable energy sources and
concept of LCC)
Objective 4

Research Approach Qualitative approach

Objective 1

Objective 2 Research Method Expert Interviews

and case studies
Objective 4
Data analysis
Discounted Present
Objective 5 Value (DPV) and
payback period
Conclusion and
recommendations Content Analysis

Figure 3-1:Research Process

According to the figure 3-1, objective 3 and 4 are achieved based on the literature
findings while rest of the objectives are achieved through expert interviews and case
studies. First expert interviews were carried out in order to collect qualitative data on
renewable energy sources, on site applicability, opportunities, limitations and benefits
of on-site renewable energy generation and cost components of on-site renewable
energy generation. After that, case studies were carried out to find out the real LCC of

38
each on site renewable energy system which was analysed based on the calculated
DPV and payback period. Based on the final output of the calculations, aim of the
research is intended to be achieved.

3.7 Summary

Available research approaches, research methods, analysing techniques were basically

identified. According to the research, qualitative approach was selected as the research
approach. Interviews and case study were identified as suitable research methods for
the research. Data analysing is discussed, describing the tools of analysing the data.
Finally, the research process is summarised showing the way the aim and objectives
are achieved.

39
 CHAPTER 04
4.0 ANALYSIS AND RESEARCH FINDINGS

4.1 Introduction

Previous chapter described the data collection methods and analysing techniques. This
chapter broadly describe the analysis of research findings. Data collection was carried
out in two stages. First stage was expert interviews and the second stage was case
studies. Expert interviews were carried out with 10 experts in the industry to validate
the literature findings and to collect additional information related to first four
objectives. Three case studies were carried out for each onsite renewable energy
system. Intension was to identify and collect the cost details of on-site applicable
energy systems which generate electricity. Expected outcome of the study is to
investigate on the on-site applicability of renewable energy sources to industr ia l
buildings and evaluate the benefit of using on site renewable energy

4.2 Findings and analysis of Expert interviews

Semi structured interviews were carried out with 10 experts in the industry who have
exposed to the usage of renewable energy systems. Interview guide line was developed
based on the literature findings. Findings of expert interviews were analysed using
content analysis technique which was described under 3.5.1 of chapter 03.

4.2.1 Objectives of Expert interviews

Objectives of expert interviews were identification of suitable onsite renewable energy

sources in the Sri Lankan context, identifying the onsite applicability of renewable
energy sources in Sri Lanka and identifying the LCC components of onsite renewable
energy systems. Under the onsite applicability of renewable sources, factors that has
to be considered when applying renewable energy sources onsite, opportunities,
limitations and benefits of applying on site renewable energy sources were identified.
Information collected through expert interviews were used to develop the
questionnaire for the case studies which was the next stage of the study.

40
4.2.2 Details of the interviewees of expert interviews

Above mentioned expert interviews were carried out with the experts in the industry
who have experience in using renewable energy systems in the industry. Following
table 4-1 shows the details of the interviewees.

Table 4-1:Details of the interviewees of Expert Interviews

Details Profession Designation Organisation Type Field of Experience

expertise in the
industry
Expert1 Quantity Quantity Contractor Quantity 14 years
(E1) Surveying Surveyor Surveying
Expert 2 Quantity Quantity Consultant Quantity 22 years
(E2) Surveying Surveyor Surveying
Expert 3 Engineering Director Consultancy/Installations Solar 10 years
(E3) (Building
services)
Expert 4 Electrical Additional Electricity Utility Power 34 years
(E4) Engineering General generation
Manager
Expert 5 Chemical Professor University Biomass 18 years
(E5) and process
Engineering
Expert 6 Chemical Professor University Solar and 20 years
(E6) and process wind
Engineering
Expert 7 Engineering Technical Consultancy/regulatory Renewable 25 years
(E7) Advisor body energy
Expert 8 Electrical Senior University Power 25 years
(E8) Engineering Lecturer generation
Expert 9 Engineering Senior Contractor Renewable 18 years
(E9) deputy energy
General
Manager
Expert 10 Electrical Assistant Regulatory body Power 10 years
(E10) Engineering Director generation

41
Interviewees were selected to address various aspects of expertise related to the
research topic. Expert interviews were carried out with solar, wind and biomass
experts, renewable energy experts and experts in the regulatory bodies in Sri Lanka to
collect information.

E1 and E2 are two experienced Quantity Surveyors who has experience with
renewable energy systems. Main focus of interviewing with Quantity Surveyors is to
identify the cost elements required for the LCC calculation. E3 is a solar specialist who
has 10 years of experience in the solar industry. E4 is an Electrical Engineer of CEB
with 34-year experience who clarified important aspects of electricity generation by
using renewable energy. E8 is also an Electrical Engineer and an academic expert. E5
and E6 are two academic experts in Biomass and solar – wind renewable energy
systems respectively. E9 is a renewable energy system installation expert who is
working for a Contractor organisation. E7 and E10 are regulatory experts of renewable
energy generation in Sri Lanka

4.2.3 Suitable on site renewable energy sources in Sri Lanka

Commonly used renewable energy sources and the suitable on site renewable energy
sources in the global context are identified through literature review as given in Table
2-3. Table 4-2 summarise the opinion of experts regarding the suitable on-site
renewable energy sources

Table 4-2:Renewable energy sources and their on-site applicability

Renewable energy
E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
sources
Solar         
Biomass         
Wind      

According to the literature findings, solar, wind and biomass are the resources which
are suitable to be applied on site for buildings (Refer Table 2-3). Literature findings
were affirmed by the responses of expert interviews. However, there are clarificat io ns
provided by the experts regarding suitability of on-site renewable energy sources.
Those clarifications are discussed below for each and every source

42
Suitability of Solar power

 Factors to be considered when using Solar Power

When solar power is used as an on-site renewable energy option, there are factors
which should be concerned. Those factors were identified through expert intervie ws.
Table 4-3 summarises the factors given by the interviewees

Table 4-3: Factors to be considered when using solar power

Criteria E1 E2 E3 E4 E5 E6 E7 E8 E9 E10

Literature
Initial cost      
Financial benefit it would deliver in the    
future
Payback period 
Interest rate 
Ability to install at site 
Ability to operate while building in use 
Amount of solar irradiation received  
Having shade free solar irradiation  
Grid availability 
Having flat land / surface 
Orientation of the inclined roof 
Roof area  
Maintainability 

Four interviewees have mentioned that initial cost as the factor that building owner
should focus when using solar power while two experts highlighted the importance of
considering future financial benefit. Elaborating the view E4 mentioned that “You
have to consider the relevant investment for solar power for 20-year period (Life span
for solar panel is normally 20 years) and compare it with the cost of obtaining same
power from the grid”. E4 further added “But I think you had better consider the
investment for 10-year life span because of the risk factor”.

43
Having shade free solar irradiation is another factor highlighted by the experts. E8
states that “It is better if you can decide the building height so that there will be no any
shadows from the nearby buildings”. Grid availability is an important factor that
should be considered. E3 emphasized that “if you are not giving to the grid
there should be large storage. As large storage is more expensive, in Sri Lanka, mostly
we use grid connected solar power”. E3 further added “electricity transportation
should be easy with a good connection point. If the grid is too far away, there is no
economic feasibility”. Therefore, grid availability close to the building premises is an
important factor to be considered.

Emphasizing the importance of the orientation of the roof E8 stated that “if the roof is
inclined the roof should be oriented towards south”. E8 further stated that “If the roof
is a flat roof this is not an issue”. Apart from the orientation roof area is another factor.
E8 claimed that “Approximately, to generate 1kw you require 80 ft2”. Intervie wees
who did not mention any factors (E7 and E10) highlighted the opportunities and
benefit of installing solar power in a building which would be discussed in the analysis

 Opportunities and benefits of using solar power

There are opportunities available in Sri Lanka that encourage the on-site renewable
energy usage in Sri Lanka. Those opportunities were identified from the literature
findings and expert interviews. According to Ministry of Power and Renewable
Energy (2013) Sri Lanka receive abandunt sun light throughout the year. Therefore
power generation from solar power is an solution to generate power. Although sun
light is freely available, energy generation using sunlight is costly (Panwar et al.,
2011). Ruangpattana, Klabjan, Arinez, & Biller (2011) state a contradictory view
stating that cost of renewable energy generated by solar power is declining at present
due to the technological advancement. Declining cost due to technologica l
advancement has become a great opportunity to develop generating solar power on
site. Apart from literature findings interviewees hilighted few other opportunities
available for solar power generation in Sri Lanka which has been summarised in table
4–4

44
Table 4-4:Opportunities for using solar power in Sri Lanka

Opportunity Literature Interviewees

E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Tariff schemes  
provided by the CEB
Sri Lanka is a tropical  
country
Can be used as an 
alternative source
with a battery back up
Indegenous source 
Cost of power 
generation is
declining due to
technological
advancements

According to E3 and E7, tariff schemes provided by the CEB has become a great
opportunity in Sri Lanka for power generation using solar power. Agreeing with the
literatur finding E8 stated that Sri Lanka is a tropical country which receive abandunt
sun light required for power generation. E4 emphasized that solar power can be used
as an alternative source with a battery back up which enhance the reliability of the
power supply which can be considered as a great benefit.

Using renewable energy systems on site would deliver many benefits to the country as
well as to the building owner. Such benefits were identified through literature review
and expert interviews conducted with the experts in the industry. Benefits highlighted
in the literature findings and expert interviews are discussed below

Commenting on the benefits of using Abdelhamid & Bahmed (2011) stated that using
solar power is a pollution free option. Hilighting another important benefit, Demirbas,
(2007) stated that solar can be used for rural electrification. Apart from those which
have been stated in the previous studies, There were plenty of benefits hilighted
through the expert interviews. Such benefits of using on site renewable energy have
been summarised in the table 4-5

45
Table 4-5:Benefits of using Solar Power

Benefits Literature Interviewees

E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Delivers a financial     
benefit
Eco friendly    
strategy can be used
as marketing tool
Pollution free   
Act as a thermal 
protection
Can be installed on 
roof top/car park
Can be used as a  
stand alone system
Solution for  
resource depletion
High life time of the 
system
Easy to fix the 
system
Reduce carbon foot 
print
Rural electrification 

As you install the system in most of the occassions on the roof top, it act as a thermal
protection according to E1. Five interviewees (E2, E7, E8, E9, E10) incisted that using
solar power delivers a financial benefit for the building owner. According to E4, E7,
E8, E9 and E10 most of the building owners have shifted towards using solar power
not only due to financial benefit it deliver in the long run but also to use eco friendly
strategy as a marketing tool. E10 stated that “Actually they market their products with
that energy efficient way of producing their products”. E6 insisted that, solar panels
last for a long time and he stated that the life time would be approximately 20 years.
On the other hand, E6 pointed out the easiness of the system to be installed as a benefit.

46
Reducing carbon foot print and following environmental friendly strategies are
encouraged by using solar energy to generate power.

 Limitations of using Solar Power

One of the main limitation of solar power is it cannot generate power at night
(Demirbas, 2005). On the other hand, other limitation is inability to power generation
continuously due to intermittent nature (Khan & Iqbal, 2005). Except the literature
findings interviewees have pointed out different aspects of the limitations which have
been summarised in the table 4- 6

Table 4-6:limitation of using Solar Power

Limitations Interviewees
Literature

E1 E2 E3 E4 E5 E6 E7 E8 E9 E10

Cannot generate power at  

rainy season
Cannot generate power at 
night
Voltage variation in the  
grid due to clouds
Harmonic generation 
Roof size 
Depend on the self- 
consumption
Cost and energy 
requirement to produce
solar panel is high
Decrease in conversion 
efficiency when
temperature rises
Very few places available 
which process silica
Intermittent nature of the 
source

E4 and E8 insisted that the cloud cover is a main limitation of generating power using
solar which create a voltage variation. Elaborating his view E8 emphasized that “This

47
limitation of cloud cover is limited in dry zone areas such as eastern province and
north central province. This limitation affects for the systems in wet zone”. E8 further
emphasized that the harmonic nature (not getting a perfect sign wave) is also a critical
limitation. E8 insisted that, power generation from solar is depend on the self-
consumption. This means that small consumers are not allowed higher generation. E6
emphasized that cost and energy requirement to produce solar panel is high. Further
elaborating his view E6 mentioned that “I can remember, earlier the energy payback
period of solar panels were almost 10 years. That means it take 10 years to cover up
the initial energy usage”. He further pointed out that although the payback period has
been reduced today due to technological advancement, still it is a considerable time.
Further clarifying the energy usage of producing solar panels, E6 emphasized that
“Although solar gives you renewable energy, energy required to generate solar panel
is not actually sustainable”. E6 further insisted that “Other issue is there are only few
places in the world where silica is processed. All the solar panel manufacturers obtain
silica from those places”.

 Applicability of Solar Power

According to the literature findings solar power can be used on site for any type of
building. All the experts, except E5 who is a biomass expert, insisted that solar is a
leading on site renewable energy option which can generate electricity. Currently solar
power is not restricted to ordinary solar panels. E10 emphasize “For solar there are
lot of options have been developed such as roof tiles and fixing solar to the glass
panels”. Using solar power with roof tiles and glass panels suggest that solar
technology is being developed as an on-site renewable energy option. Therefore,
considering both literature findings and findings of the expert interviews, it is clear
that solar power is suitable to be used as an on-site renewable energy source.

Suitability of Wind power

 Factors to be considered when using wind power

According to literature findings, wind power is another renewable energy option that
is suitable to be implemented on site. There are factors which should be considered in
using wind as an onsite renewable energy source. factors are given in Table 4-7

48
Table 4-7:Factors to be considered when using Wind Power

Criteria E1 E2 E3 E4 E5 E6 E7 E8 E9 E10

Literature
Initial cost      

Financial benefit it would deliver in    

the future
Payback period 

Interest rate 

Ability to install at site 

Ability to operate while building in 

use
Resource availability  

Having flat land / surface 

Maintainability 

According to E1, E2, E4, E6 and E9 initial cost is a major factor to be considered. On
the other hand, according to E2, E4 and E6, financial benefit the system would deliver
should be taken into consideration. Another important factor of using wind power is
resource availability. Except E5, all other experts emphasized that wind power cannot
be harnessed everywhere in the country. Wind power is site specific. Wind atlas
provided by the SEA (Sustainable Energy Authority) should be referred to identify the
areas where wind power can be harnessed. Elaborating this view E4 stated that “In Sri
Lanka wind power is available through the Polk straight from Jaffna peninsula
covering areas like Kalpitiya. Therefore, if you install a wind plant in a building in
Colombo area, it would not generate a considerable power”. Considering above
factors is important to install an energy system which is powered from wind power.

 Opportunities and benefits of using Wind Power

Similar to solar power, wind power also delivers many advantages. Identified
advantages are listed in the table 4-8

49
Table 4-8:Oppotunities and benefits of using Wind Power

Benefits Literature Interviewees

E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Capability of 24          
hour power
generation
Delivers a financial     
benefit
Eco friendly    
strategy can be used
as marketing tool
Pollution free   
Can be used as a  
stand alone system
Solution for 
resource depletion
Reduce carbon foot 
print
Reduce 
atmospheric
degredation

Wind power is capable of generating power even during the night time without any
restrictions. According to E6, “you can harness power from wind 24 hours unlike solar
which can only be harnessed 8 hours per day”. Apart from that, wind power can be
used as a standalone system which is a great advantage for electrifying areas where
grid lines cannot be extended and result in an energy wastage. According to literature
findings, globally, there is a limitation in extending power lines to rural areas where a
huge energy loss would occur (Koulagi, Hosmath, Madival, & Revankar, 2016 ; Duffie
& Beckman, 2013). Authors further pointed out that on site wind power generation is
a successful alternative to the above issue.

50
 Limitations of using Wind Power

Although wind power is beneficial, it delivers some limitations as well. Following

table 4-9 summarise the limitations of using wind power according to literature
findings and findings of the literature review

Table 4-9:Limitations of using Wind Power

Limitations Literature Interviewees

E1 E2 E3 E4 E5 E6 E7 E8 E9 E10

Site specific         
Seasonal  
limitation
Intermittent 
nature
Higher capital 
requirement

As previously described wind power cannot be harnessed everywhere. Power

generation from wind has been restricted to the areas shown on the wind map published
by the SEA. Apart from that, E8 highlighted the seasonal limitation of using wind
power. E8 emphasized that “One limitation of wind is there is an off season for both
north east and south west monsoon from January to April”. On the other hand,
intermittent nature of the resource and requirement of a higher capital has affected the
application of wind power.

 Applicability of Wind Power

Jia, et al., (2014) have pointed out that a building is also a micro grid and a suitable
test bed for smart grid technologies. Authors further state that other than photovoltic
panels, on site wind power is used to develop smart grid in both residential and
commercial buildings. Therefore, globally, on site power generation is a concept that
is practically applied. Although according to the literature findings and findings of the
expert interviews, there is a possibility of using wind power as an onsite renewable

51
energy, there are clarifications and justifications provided by Experts regarding the
applicability of resources. Such clarifications are discussed in detail below. According
to the responses given by the interviewees, applicability was discussed based on three
factors. They are, technical feasibility, financial feasibility and practical feasibility.
Table 4-10 summarise the responses given by each experts regarding the applicability
of wind power

Table 4-10:On site applicability of Wind Power

Factor E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Technical feasibility   X   X   
Financial feasibility   X  X X  X X
Practical feasibility X X X X X X X  

(√ - feasible, X – not feasible)

Four interviewees (E1, E2, E4 and E8) pointed out lack of practical feasibility as the
only issue with wind power. Four interviewees have given various justifications for
inability of applying wind power on site for buildings. E1 stated that “when you install
wind turbines in the site there can be a sound and a rotating shadow during the day
time, therefore wind turbines are not suitable specially for hotels where you have to
utilise the garden for visitors”. According to E2 “wind is not applied due to practical
issues with its maintenance”. E4 insisted that, wind is not the best option. Elaborating
his view E4 pointed out that “if you install a wind plant in a building in Colombo area,
it would not generate a considerable power. Even if it is fixed close to the sea, it would
not start because there is a certain wind speed to start the system”. E4 further said
that, “buildings have a limited height but wind plants are expected to have more
height”. E8 claimed that, “For wind there should be a suitable structure for the wind
turbines to be installed. Therefore, practically there is a problem with wind”.

Two experts (E9 and E10) emphasized the lack of financial feasibility or inability to
generate 1kW of power at a lower cost as the reason of not using wind power on site
for buildings. E9 insisted that “Technically I would say wind is ok. But financially I
don’t think it would be beneficial”. Explaining his view E9 further stated that “you
have to invest a lot and cost of producing energy would be high”. E9 added “as the

52
parts are moving the operational and maintenance cost would be very high”.
According to E10, theoretically wind power is possible to be used on site but the
technology has not been up to the standards yet. Elaborating his view E10 stated that
“There are options being developed such as vertical axis wind turbines. But the
technology is not developed to generate power at a lower cost”. E10 also states that
having high operation and maintenance cost reduces its financial feasibility.

Two interviewees (E3 and E7) insisted that wind power cannot be used on site for
buildings. According to E3 “Actually wind power is almost impossible to use on site”.
E7 insisted that “using wind at the building site with small wind turbines is not a
developing technology globally”. E7 further stated that, if you cannot generate 1kW
at a lower cost there is no point in using such a resource to generate power. According
to E7, such financial benefit can be obtained with large scale production, not with
small scale generation. E6 also pointed out the same fact stating that “Wind is actually
commercially feasible in large scale”. Therefore, generating electrical power in large
scale using wind is the developing trend according to the response of the experts.

Although wind has an advantage over solar and despite the fact that wind can be
applied on site according to literature, considering above reasons and justificatio ns
provided by experts, wind power cannot be used on site for Sri Lankan buildings.

Suitability of Biomass

 Factors to be considered when using Biomass

There are various factors that you should consider when generating power using
biomass. Such factors mentioned by interviewees are summarised in the table 4 – 11

Table 4-11:Factors to be considered when using Biomass to generate electricity

Criteria E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Literature

Initial cost    
Ability to install at site  
Ability to operate while building in use 

53
 Criteria E1 E2 E3 E4 E5 E6 E7 E8 E9 E10

Literature
Effect to the structure if installed within the 
building
Effect to the surrounding area and ground   
water
Local authority regulations 
Amount of waste generated continuously     
Technology and technology management 
Initial design  

According to above table, five experts pointed out the amount of waste generated and
continuous supply of waste as the main criteria of using biomass to generate electric ity.
According to three experts, initial cost or the capital has become a major concern. E3
insisted that “When it comes to biomass you should focus on fumes and environmental
impacts that would occur to the adjacent buildings”. The same point was highlighted
by E1. E5 emphasized that “Other important criteria are capital that you can invest,
technology management (feeding the system with waste) and initial design of the
system should focus on power generation”. Therefore, feeding the system with waste
and carrying out initial designing with the intention of installing the system are
important aspects to be concerned.

 Opportunities and benefits of Biomass

Using biomass within the building delivers many advantages for the building owners
and to the community as well. Benefits pointed out by the interviewees have been
summarised below in table 4- 12

Table 4-12:Opportunities and benefits of using Biomass

Benefits Literature Interviewees

E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Save cost of 
disposing waste
from the
building

54
 Benefits Literature Interviewees
E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Reduces 
emission of bio
methane
Generate 
fertilisers
Carbon neutral 
Wide range of 
biomass sources
are available

According to E1, cost of disposing waste can be saved by using a biomass plant within
the building premises. E5 emphasized that using biomass, emission of bio methane can
be reduced. At the end of the day reducing bio methane emission reduce the GHG
emissions. As a bi product of generating biogas, fertilisers can be obtained. E8 insisted
that biomass is a carbon neutral source. Elaborating his view E8 stated that “biomass
is carbon neutral. It emits what it absorbs as CO2”

According to literature findings, main opportunity of biomass is having a wide range

of biomass sources available (Bull,2001). Apart from that interviewees highlighted
few other opportunities of using biomass. E5 insisted that biomass has become a
resource which can be easily applied due to the availability of waste. E3 pointed out
that, there is a wide range of equipment that can be operated using biomass as the
energy source

 Limitations of using Biomass

Limitations of using biomass was identified from the expert interviews. Various
limitations put forward by interviewees are summarised below in table 4-13

Table 4-13: Limitations of using Biomass

Limitations Interviewees
Literature

E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
High initial cost  
High operational cost  

55
 Limitations Interviewees

Literature
E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Require additional space 
System has to be continuously feed 
with waste
Slow nature of the process 
All waste cannot be treated 
biologically
Conditions should be controlled 

E1 pointed out that biomass usage to generate power is costly and it involves
considerable maintenance cost as well. E2 emphasized that requiring an additiona l
space as a limitation where you require an additional plot of land. According to E5, it
is important to feed the system with waste. On the other hand, E5 emphasized that, the
process of producing bio methane, is a slow process which takes additional time to
generate power. In addition, E5 pointed out that, all waste cannot be generated
biologically to generate electricity. Although you have ample of waste, if you are going
to treat them biologically you would not be able to treat them all as it takes time.
Therefore, you have to follow various other waste disposal procedures to dispose
waste. Further, E5 mentioned that, process should be carried out under controlled
conditions. Elaborating his view, E5 stated that “I mean you have to control the
temperature, alkalinity and pH value”. Those are the limitations that developers would
have to face when using biomass to generate power.

 Applicability of Biomass

According to literature findings, Power can be generated from biomass resources

which has a wide range starting from agricultural and forest product and wastes up to
crops grown specially for generating power (Bull,2001). Biomass has been identified
as a prominent renewable energy source which can be generated on site among other
renewable sources (Ruangpattana, Klabjan, Arinez, & Biller, 2011).

56
According to the response given by interviewees, except I6 who is a solar and wind
expert, biomass is applicable on site for energy generation. Experts gave differe nt
responses regarding power generation using biomass. The responses can be
summarised as given in table 4- 14

Table 4-14: Energy generation from Biomass

Interviewee E1 E2 E3 E4 E5 E6 E7 E8 E9 E10
Heat Energy generation          
Electricity generation      X X  

Seven interviewees have pointed out biomass can be used to generate both heat and
electrical energy. But there were arguments and justifications which are put forward
by those seven experts. E4 insisted that “biomass you won’t be able to generate power
in a normal building”. E4 further added “in hotels, you can use kitchen waste to
generate biogas”. Highlighting the importance of biomass E4 stated that “Biogas can
be used either to generate electricity or for heating purposes”. Further elaborating his
view, E4 emphasized that “theoretically 50-60 % energy will be converted to
electricity. But if you use for heating purposes, you will be able to use considerable
energy (almost 100%) without wastage”. Therefore, according to E4, using biogas
which is generated from biomass for heating purposes would be more efficient and
sustainable than generating electricity. E5 also stated that it is possible to send bio
methane to boilers to generate steam or bio methane can be used to generate electric ity.
E5 added “Actually you cannot generate electricity directly from bio methane, you
have to upgrade the gas removing CO2 and then send the gas to generator to generate
electricity”. According to E5, “As a rule of thumb, 100-ton biomass required to
generate 1Mw of electricity”. Further describing the process of generating electric ity
E5 stated that “there are stages where we have to survive on electricity obtain from
the grid”. As an example, E5 stated that “if the waste particles are huge, you have to
crush them to small particles. For this crusher you obtain electricity from the grid”.
Therefore, it is clear that electricity production from biomass is not totally sustainab le.
Highlighting another important fact, E5 stated that “you can mix two types of waste to
generate gas with required quality to generate electricity”.

57
Presenting a contradictory view regarding power generation using biomass, E7 stated
that “Biomass is also possible but not for power generation basically. Biomass is used
for thermal applications”. According to E7, biomass cannot be used by every building.
Usage of biomass can practically be done in buildings such as hotels and hospitals.
Elaborating his view, E7 stated that “Using biomass for power generation is
technically possible but practically it is difficult because they are engaging in a
different business”. Further describing the scenario E7 insisted that if we consider a
hotel, they have to maintain their facilities and deliver a satisfactory service for their
customers. With all those work they have to execute daily, it is really hard for them to
maintain a biomass plant up to the standards so that it could deliver a considerable
power. Therefore, according to E7, what is possible with biomass is generating heat
which can be used for heating and cooking purposes.

Highlighting another important aspect, E8 mentioned that “Biomass is difficult to use.

The issue with biomass is maintaining the steady supply of biomass”. Providing a
solution to maintain the steady supply of biomass, E8 pointed out that “There is an
option to go with chipped/processed biomass, but it is bit costly”. Commenting on the
electricity generation using biomass, E10 mentioned that “Biomass
is also possible specially at industrial buildings. They generate both electricity and
heat”. According to E10, biomass can be used at industrial buildings to generate
electricity.

Suitability of Hydro Power

According to literature findings hydro power is a cost effective way of generating

power (Paish, 2002). Author further state that almost all the large water bodies have
been exploited to generate electricity in large scale and due to the fact of not having
environmental sustainability in those projects, small scale hydro power generation is a
field that is being developed. All interviewees kept hydro out of the category which
can be used to generate power on site. The justifications provided by interviewees can
be discussed as follows.

Commenting on hydro power E3 insisted that, “it should be environmentally feasible,

there should be a good head and the flow should be there throughout the year”. E3

58
added “On site availability of the resource is the main criteria”. In addition E3
mentioned that “there should be favourable conditions to fix the turbine, because of
the civil cost is high, it becomes unfeasible”. E10 emphasized that, “Hydro power is
also difficult to be implemented. Although you have required water bodies taking
approval is a long process”. According to the justifications given by the interviewees,
to generate on site hydro power, you require a water body with a good head and which
flow throughout the year. Although you have such a water body within your building
premises, generating hydro power associated with lot of cost. On the other hand,
obtaining approval is a long and time consuming process. Therefore, building owners
are practically and financially not in a position to generate hydro power within the
building site itself.

Suitability of other sources

Regarding other renewable energy sources, interviewees pointed out that all other
renewable energy sources identified are theoretically or technically applicable but
commercially not feasible. Highlighting the importance of geothermal power E3 stated
that, “In geo thermal what we do is, extracting the heat in the earth by a refrigerant
cycle. There has to be a higher temperature”. Further E3 pointed out that, “basic
criteria of geothermal is whether it is legally allowed and whether we can obtain a
considerable temperature difference”. Adding further to this argument E7 stated that,
“temperature difference in the sea also can be used for cooling purposes such as air
conditioners”. But according to both E3 and E6, geothermal power cannot be
generated on site although there are other sustainable options available with
geothermal energy. E6 pointed out the financial inability of using all other renewable
energy sources on site to generate power. E6 emphasized that “Technically ok but
commercially not feasible. We have already done a research for geothermal power.
But the cost of power generation is very high”. E8 and E10 also pointed out the fact
of not having financial feasibility. Therefore, Other renewable sources also offer the
option of electricity generation and other forms of energy generation. But power
generation cannot be achieved on site due to lack of financial feasibility.

59
Considering the literature findings and responses of the interviewees, solar and
biomass are the only resources applicable to generate power in the Sri Lankan context.
Further analysing is carried out considering only solar and biomass.

4.2.4 Life Cycle Cost components of Solar power

As the study focus on comparing the LCC of energy systems with the cost of obtaining
electricity from the grid, it is important to identify the cost elements related to each
energy system. Life cycle cost components identified through literature is given in
table 4.15 below

According to the literature, although cost components are identified in general for both
energy systems, practically cost components of a solar system and a biomass plant
cannot be generalised. Stating this view, E3 stated that “It is hard to generalise the
cost components associated with different renewable energy sources”. Therefore, cost
components related to each solar energy system is given in table 4-15

Table 4-15:LCC components of solar power system

Interviewee
Cost Elements E1 E2 E3 E4 E5 E6 E7 E8 E9 E10

Cost of Equipment         
 Solar Panels 
 Inverters 
 cables 
Cost of structure 
Transport cost   
Fixing cost  
Operational and maintenance cost       
Cost of disposal  

According to the responses of the expert, basically we have to consider, initial capital,
operation and maintenance cost and cost of disposing the system. However except E5,
all interviewees pointed out that operation and maintenance cost is almost negligib le.
Confirming this view E7 stated that “Operation and maintenance cost is almost nil”.
Above mentioned cost components shall be considered to derive the LCC of solar
power system based on case studies.

60
4.2.5 Life Cycle Cost components of Biomass

Other on site applicable renewable energy source for power generation is biomass.
Identified cost components related to biomass systems are given in table 4-16

Table 4-16: LCC components of Biomass plant

Interviewees
Cost Elements E1 E2 E3 E4 E5 E6 E7 E8 E9 E10

Cost of Equipment       
 Generator  
Cost for biomass (If exported) 
Transport cost 
Labour cost 
Operational and maintenance cost        
Replacement cost  

In biomass also generally identified LCC components are initial capital and operation
and maintenance cost. E4 emphasized that, “If you send generated CO (Carbon
monoxide) to a diesel engine or boiler there is lot of maintenance cost”. Therefore,
unlike solar, in biomass operation and maintenance cost is an important cost
component that should be considered in calculating the LCC of a biomass plant.

The next stage of the research is to calculate the LCC of solar and biomass energy
systems which generate electricity. Three case studies were carried out to calculate and
justify the LCC of each renewable energy source. Main focus is to achieve the final
objective of evaluating the benefit gained by using each renewable energy source.
Based on the result of the final objective, suitability of both on site renewable energy
for the electrification of industrial buildings would be evaluated

4.3 Findings and analysis of Case Studies for solar power

Three cases where solar power has been used to generate electricity were selected for
the study. Industrial buildings in Galle district are considered as the case boundary
while solar power system installed in each building is considered as the unit of analysis
for each selected case. Table 4-18 summaries the details of each selected case

61
Table 4-17:Details of cases for solar power systems

Description Case 1(SC1) Case 2(SC2) Case 3(SC3)

Factory that produce

Building type Tea factory Garment factory
rubber products
System capacity 197 kW 208 kW 104 kW
Year of
2009 2013 2014
installation

It is important to clearly define the cost elements which shall be used for the LCC
calculation. Cost elements that should be considered to calculate the LCC of solar
energy systems are identified through literature and expert interviews as given in Table
4-15 and Table 4-16. In addition, there are other cost elements that are identified during
the case studies. Following Table 4-17 summarizes the cost components identified
through literature review, interviews and case studies and the final cost break down to
be considered for calculating the LCC

Table 4-18:Summary of cost components of solar power

Cost Components Literature Expert Case Finalized

Review Interviews Studies cost
components
Cost of Equipment    
 Solar Panels   
 Inverters   
 DC Surge Arrestors  
 AC surge Arrestors  
 Cable mounting and wiring accessories  
 AC cable 16 mm for 15 m Armoured Core  
Cost of structure/ Roof mount cost   
Transport Cost   
Fixing Cost   
Net metering  
Certificates by SEA  
Repair Cost 
Replacement Cost 

62
 Cost Components Literature Expert Case Finalized
Review Interviews Studies cost
components
Operation and Maintenance cost    

Almost all the cost components identified in each stage of the research are used for the
final calculation of LCC except repair cost and replacement cost. Repair cost and
replacement cost are amalgamated and included as operation and maintenance cost for
the cost calculation. Therefore, repair cost and replacement cost are included as
operational and maintenance cost in the final calculation.

following equation gives the discounted cost of each cost component

𝐹𝐶
𝐷𝑃𝑉 = (Source: A. Atmaca & Atmaca, 2016)
(1+𝑑) 𝑛

(DPV = Discounted Present Value, FC = Future Cost, d = discount rate, n = number

of years)

 Discount rate = 7.25% (Source: Central Bank of Sri Lanka, 2018)

 Life span of each Solar PV system is considered as 20 years
 Average number of hours that solar panels receive sunlight is 5 hours
 2018 has been considered as the base year for the calculations

4.3.1 Case 1 (SC1)

SC1 is a tea factory. A solar power system with a system capacity of 197 kW has been
installed in 2009 utilizing the full roof area of the building.

Discounted LCC for SC1

 Discounting Initial Cost

FC = 15,803,060(1+0.0725) 9
FC = 29,669,955.62

63
 Discounting Operational and Maintenance cost

Timing Amount D/F Discounted Amount

5th 8000 1 8000
10th 8000 0.496623186 3972.985485
15th 8000 0.349977792 2799.822338
14,772.81

(Operational and maintenance cost is assumed as Rs. 8000.00)

Discounted LCC = 29,669,955.62 + 14,772.81 = 29,684,728.43

Discounted LCC per 1kW = 29,684,728.43/197 = 150,683.90

4.3.2 Case 2 (SC2)

SC2 is a garment factory. A solar power system with a system capacity of 208 kW has
been installed in 2013 utilizing the full roof area of the building.

Discounted LCC for SC2

 Discounting Initial Cost

FC = 21,875,200(1+0.0725) 5
FC = 31,041,202.48

 Discounting Operational and Maintenance cost

Timing Amount D/F Discounted Amount

5th 17,600 1 17,600
10th 17,600 0.496623186 8,740.57
15th 17,600 0.349977792 6,159.61
32,500.18

(Operational and maintenance cost is assumed as Rs. 17,600.00)

Discounted LCC = 31,041,202.48+ 32,500.18 = 31,073,702.65

Discounted LCC per 1kW = 31,073,702.65/208 = 149,392.80

64
4.3.3 Case 3 (SC3)

Case 3 is a factory building which produces rubber products. A solar power system
with a system capacity of 104 kW has been installed in 2014 utilizing almost all the
roof area of the building.

Discounted LCC for SC3

 Discounting Initial Cost

FC = 11,717,240 (1+0.0725) 4
FC = 15,502,956.52

 Discounting Operational and Maintenance cost

Timing Amount D/F Discounted Amount

5th 11,300 1 11,300
10th 11,300 0.496623186 5,611.84
15th 11,300 0.349977792 3,954.75
20,866.59

(Operational and maintenance cost is assumed as Rs. 11,300.00)

Discounted LCC = 15,502,956.52+ 20,866.59= 15,523,823.11

Discounted LCC per 1kW = 31,073,702.65/208 = 149,267.53

Although theses solar energy systems require a higher capital, because of the ta riff
rates provided by CEB for industrial buildings, power generation delivers a financ ia l
benefit for your industry. Table 4-19 gives the tariff rates provided by CEB (for 11,000
Volt nominal and above industrial consumers)

Table 4-19:Industrial Tariff rates provided by CEB

Time Interval Number of hours Energy Charge

Peak (18.30 – 22.30) 4.00 23.50
Day (5.30 – 18.30) 13.00 10.25
Off – Peak (22.30 – 5.30) 7.00 5.90

Source: (Ceylon electricity Board, 2018)

65
Average charge per hour = {(4.00 X 23.50) + (10.25 X 13) + (5.90 X 7)}/24 = 11.20

Energy charge is different in each time interval. Therefore, an average charge has to
be considered to obtain the energy charge per hour

Cost benefit gained and payback period of SC1

Power generated by solar system (case 1) = 197 X 5 = 985.00

Cost benefit gained per month = 985.00 X 30 X 11.20 = 330,960.00

Number of month required to offset the initial cost = 29,684,728.43/ 330,960.00

= 89.69 months
Payback period = 90 months/12 = 7.5 years
Cost benefit gained and payback period of SC2

Power generated by solar system (case 2) = 208 X 5 = 1,040.00

Cost benefit gained per month = 1,040.00 X 30 X 11.20 = 349,440.00

Number of month required to offset the initial cost = 31,073,702.65/349,440.00

= 88.92 months

Payback period = 89/12 = 7.5 years

Cost benefit gained and payback period of SC3

Power generated by solar system (case 3) = 104 X 5 = 520.00

Cost benefit gained per month = 520.00 X 30 X 11.20 = 174,720.00

Number of month required to offset the initial cost = 15,523,823.11/174,720.00

= 88.81 months

Payback period = 89/12 = 7.5 years

Table 4-20 summaries the discounted LCC, benefit gained by the building owners
monthly and the payback period of each energy system.

66
 Table 4-20: LCC of solar systems

Description SC1 SC2 SC3

Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount

Cost of Equipment
 320 W panel 607.00 12,013.20 7,292,012.40 650.00 15,886.00 10,325,900.00 325.00 17,108.00 5,560,100.00
 Inverter 8.00 325,428.00 2,603,424.00 8.00 430,520.00 3,444,160.00 4.00 461,822.00 1,847,288.00
 Roof mount cost 607.00 1,786.00 1,084,102.00 650.00 2,321.80 1,509,170.00 325.00 2.538.00 824,850.00
 DC surge arrestor 40.00 12,502.00 500,080.00 41.00 16,544.00 678,304.00 20.00 17,766.00 355,320.00
 AC surge arrestor 1.00 20,022.00 20,022.00 1.00 26,508.00 26,508.00 1.00 28,388.00 28,388.00
 Cable, mounting and 205.00 16,262.00 3,333,710.00 210.00 21,620.00 4,540,200.00 102.4 23,124.00 2,367,897.00
wiring accessories
 AC Cable 16mm for 1.00 7,520.00 7,520.00 2.00 9,964.00 19,928.00 1.00 10,622.00 10,622.00
15m Armoured 4 core
Transport 15,788.16 21,855.50 11,696.24

Fixing cost 931,501.44 1,289,474.50 690,078.16

Net metering 6,900.00 9,100.00 9,700.00
Certificates by SEA 8,000.00 10,600.00 11,300.00
Total Initial Cost 15,803,060.00 21,875,200.00 11,717,240.00
Discounted Initial Cost 29,669,955.62 31,041,202.48 15,502,956.52
Operational and 14,772.81 32,500.00 20,866.59
maintenance cost
T otal LCC 29,684,728.43 31,073,702.65 15,523,823.11
Discounted LCC per 1kW 150,683.90 149,392.80 149,267.53
Cost benefit (per month) 330,960.00 349,440.00 174,720.00
Payback Period (Years) 7.5 years 7.5 years 7.5 years

67
According to the discounted LCC per kW each solar PV system has almost 150,000.00
LCC per kW and 7.5-year payback period.

4.4 Findings and analysis of Case Studies for Biomass

Waste generated from buildings can be used to generate electricity as identified in the
analysis of expert analysis. According to the findings of expert interviews, industr ia l
buildings tends to generate electricity by using biomass than other building types.
Industrial Buildings in Galle district are considered as the case boundary and the
biomass energy systems in each case is considered as the unit of analysis of each case.
Table 4-21 summarizes the details of the each selected case

Table 4-21:Details of the case studies for biomass

Description Case 1(BC1) Case 2(BC2) Case 3(BC3)

Building type Garment Factory Garment Factory Cement Factory

System capacity 29 kW 25 kW 18.3 kW

Year of
2018 2011 2013
installation

Two garment factories and a cement factory has been selected as the cases. It is
important to clearly define the cost elements that has to be used for the LCC
calculation. Previously cost elements were identified through literature review and
expert interviews. Apart from previously identified cost elements, there are additiona l
cost elements found out through case studies. Table 4-22 summarizes the collected
cost components and final cost components that would be used to the case studies

Table 4-22:Summary of Cost Components of Biomass

Cost components Literature Expert Case studies Finalized cost

review Interviews components
Material and equipment cost    
 Waste and gas storage  
 Generator   
 Bio reactors  
Transport Cost  

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 Cost components Literature Expert Case studies Finalized cost
review Interviews components
Labour cost  
Replacement Cost 
Operation and Maintenance Cost    

All most all the cost components identified in each stage of the study (literature review,
expert interviews and case studies) are used for the final LCC calculation except
replacement cost and cost of biomass. As in the selected cases, biomass is not
imported, that cost component is ignored in the calculation. Replacement cost is
included in the operation and maintenance cost.

4.4.1 Case 1 (BC1)

Case 1 is a garment factory. A biomass system with a system capacity of 29 kW has

been installed in 2018. LCC calculations related to Case 1 are given below

Discounted LCC for BC1

 Discounting Initial Cost

Initial cost = 508,917.49 (As the project is done in 2018, initial cost is not discounted )

 Discounting Operational and Maintenance cost

Operation and Maintenance Cost (Refer the attachment) = 264,414.37

Discounted LCC = 508,917.49 + 264,414.37 = 773,331.86
Discounted LCC per 1kW = 644,443.22
4.4.2 Case 2 (BC2)

Case 2 is a garment factory. A biomass system with a system capacity of 25 kW has

been installed in 2011. LCC calculations related to Case 2 are given below

69
Discounted LCC for BC2

 Discounting Initial Cost

FC = 268,614.60 (1+0.0725) 7
FC = 438,440.56

 Discounting Operational and Maintenance cost

Operation and Maintenance Cost (Refer the attachment) = 227,797.21

Discounted LCC = 438,440.56 + 227,797.21 = 666,237.76
Discounted LCC per 1kW = 640,613.23
4.4.3 Case 3 (BC3)

Case 3 is a cement factory. A biomass system with a system capacity of 18.3 kW has
been installed in 2013. LCC calculations related to Case 3 are given below

Discounted LCC for BC3

 Discounting Initial Cost

FC = 235,452.50 (1+0.0725) 9
FC = 334,110.26

 Discounting Operational and Maintenance cost

Operation and Maintenance Cost (Refer the attachment) = 173,591.11

Discounted LCC = 334,110.26 + 173,591.11 = 507,701.37
Discounted LCC per 1kW = 668,028.12
Following calculations are done based on the tariff rates provided by CEB as given in
Table 4-20

Cost benefit gained and payback period of BC1

Cost benefit gained per month = 29 X 30 X 11.2 = 9,744.00

Number of month required to offset the initial cost = 773,331.86/9,744.00

= 79.36months
Payback period = 79.36/12 = 6.61 years

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Cost benefit gained and payback period of BC2

Cost benefit gained per month = 25 X 30 X 11.2 = 8,400.00

Number of month required to offset the initial cost = 666,237.76/8,400.00

= 79.31months
Payback period = 79.31/12 = 6.61 years

Cost benefit gained and payback period of BC3

Cost benefit gained per month = 29 X 30 X 11.2 = 9,744.00

Number of month required to offset the initial cost = 773,331.86/9,744.00

= 79.36months
Payback period = 79.36/12 = 6.61 years

Table 4-23 summaries the LCC of each case which are calculated above.

Average LCC per 1kW = (644,443.22 + 640,613.23 + 668,028.12)/3 = 651,028.19

Average Payback period = (6.61 + 6.61 + 6.88)/3 = 6.7 years

According to Table 4-24, biomass energy systems has a LCC of 651,000.00 and a
payback period of 6.7 years. Biogas systems generate low power compared to solar
PV systems and delivers a low cost benefit compared to Solar PV systems. On the
other hand, it has a higher LCC per kW compared to Solar PV with a higher operational
and maintenance cost. Although the biogas energy systems has a comparatively low
payback period, Solar PV system is more beneficial compared to biogas systems.

71
Table 4-23:LCC of Biomass Systems

Description BC1 BC2 BC3

Amount Amount Amount
Material and equipment cost

 Waste and gas storage 278,549.80 152,000.00 140,000.00

 Generator 177,650.00 100,000.00 81,000.00
 Bio reactors 2,284.43 1,410.00 1,125.00
Total material and equipment cost 458,484.23 253,410.00 222,125.00
Transport cost 4,584.84 2,534.10 2,221.25
Labour cost 45,848.42 12,670.50 11,106.25
Total initial cost 508,917.49 268,614.60 235,452.50
Discounted Initial Cost 508,917.49 438,440.56 334,110.26
Operational and Maintenance Cost 264,414.37 227,797.21 173,591.11
Total LCC 773,331.86 666,237.76 507,701.37
Discounted LCC per 1kW 644,443.22 640,613.23 668,028.12
Cost Benefit (per month) 9,744.00 8,400.00 6,148.80
Payback period (Years) 6.61 6.61 6.88

72
4.5 Sensitivity Analysis

There are cost elements and factors that could fluctuate so that they can make an
impact for the final results obtained in Table 4-20 and 4-23. According to solar and
biogas developers, following cost elements and factors are possible to change, making
an impact to the LCC

4.5.1 Factors to be considered in Sensitivity Analysis for Solar power

According to experts and solar developers cost of Solar panels and cost of inverter are
cost significant items of the LCC calculation which could vary. In addition, number of
hours that pannels receive sun light also could change. Therefore, these three factors
were changed in the sensitivity analysis. While changing one of the above factors,
other factors are remained constant

Table 4-24:Factors to be considered for sensitivity analysis of solar power

Factors Expert Interviews Solar Developers

Cost of Equipment
 Solar Panels  
 Inverters  
 DC Surge Arrestors
 AC surge Arrestors
 Cable mounting and
wiring accessories
 AC cable 16 mm for 15 m
Armoured Core
Cost of structure/ Roof
mount cost
Transport Cost
Fixing Cost
Net metering
Certificates by SEA
Operation and Maintenance
cost
Number of hours receiving 
sunlight

73
4.5.2 Factors to be considered in Sensitivity Analysis for Biomass

According to experts and biomass developers, in biomass systems, cost of waste and
gas storage items and cost of generator are the most cost significant items and they can
make an impct when subjected to changes. While changing one variable, other factors
are assumend to remain constant.

Table 4-25:Factors to be considered in Sensitivity Analysis for Biomass

Factors having an Expert Interviews Biomass Developers

impact on cost
Material and equipment
cost
 Waste and gas storage  
 Generator  
 Bio reactors
Transport Cost
Labour cost
Replacement Cost
Operation and
Maintenance Cost

Table 4-25 and Table 4-26 shows the summary of sensitivity analysis of solar and
Biomass respectively.

74
 Table 4-26:Sensitivity Analysis of Solar Power
Cost element/factor SC1 SC2 SC3

Cost of solar Panels 22,560.00 20,000.00 25,000.00 27,500.00 22,560.00 20,000.00 25,000.00 27,500.00 22,560.00 20,000.00 25,000.00 27,500.00

T otal LCC 29,684,728.43 28,130,808.43 31,165,808.43 32,683,308.43 31,073,702.65 29,409,702.65 32,659,702.65 34,284,702.65 15,523,823.11 14,691,823.11 16,316,823.11 17,129,323.11

LCC per 1kw 150,683.90 142,795.98 158,202.07 165,905.12 149,392.80 141,392.80 157,017.80 164,830.30 149,267.53 141,267.53 156,892.53 164,705.03

cost benefit 330,960.00 330,960.00 330,960.00 330,960.00 349,440.00 349,440.00 349,440.00 349,440.00 174,720.00 174,720.00 174,720.00 174,720.00
Payback period (months)
89.69 84.99760826 94.16790074 98.75304698 88.92 84.16238168 93.46297692 98.11327454 88.85 84.08781541 93.38841065 98.03870827
Payback period (years)
7.50 7.083134021 7.847325062 8.229420582 7.50 7.013531807 7.78858141 8.176106211 7.50 7.007317951 7.782367554 8.169892356
Cost of inverter
611,000.00 575,000.00 650,000.00 700,000.00 611,000.00 575,000.00 650,000.00 700,000.00 611,000.00 575,000.00 650,000.00 700,000.00
T otal LCC 29,684,728.43 29,396,728.43 29,996,728.43 30,396,728.43 31,073,702.65 30,785,702.65 31,385,702.65 31,785,702.65 15,523,823.11 15,379,823.11 15,679,823.11 15,879,823.11

LCC per 1kw 150,683.90 149,221.97 152,267.66 154,298.11 149,392.80 148,008.19 150,892.80 152,815.88 149,267.53 147,882.91 150,767.53 152,690.61

cost benefit 330,960.00 330,960.00 330,960.00 330,960.00 349,440.00 349,440.00 349,440.00 349,440.00 174,720.00 174,720.00 174,720.00 174,720.00

Payback period (months) 89.69 88.82260221 90.63551012 91.84411539 88.92 88.10011062 89.81714358 90.96183223 88.85 88.02554435 89.74257732 90.88726596
Payback period (years)
7.50 7.401883518 7.552959177 7.653676282 7.50 7.341675885 7.484761965 7.580152686 7.50 7.335462029 7.47854811 7.57393883
Number of Hours panels receive Sunlight
5 3 4 6 5 3 4 6 5 3 4 6
T otal LCC
29,684,728.43 29,684,728.43 29,684,728.43 29,684,728.43 31,073,702.65 31,073,702.65 31,073,702.65 31,073,702.65 15,523,823.11 15,523,823.11 15,523,823.11 15,523,823.11
LCC per 1kw
150,683.90 150,683.90 150,683.90 150,683.90 149,392.80 149,392.80 149,392.80 149,392.80 149,267.53 149,267.53 149,267.53 149,267.53
cost benefit 330,960.00 198,576.00 264,768.00 397,152.00 349,440.00 209,664.00 279,552.00 419,328.00 174,720.00 104,832.00 139,776.00 209,664.00

Payback period (months) 89.69 149.4879967 112.1159975 74.74399834 88.92 148.2071441 111.1553581 74.10357203 88.85 148.082867 111.0621502 74.04143348

Payback period (years) 7.50 12.45733306 9.342999793 6.228666528 7.50 12.35059534 9.262946504 6.17529767 7.50 12.34023891 9.255179185 6.170119457

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 Table 4-27:Sensitivity Analysis for Biomass

Cost element/factor
BC1 BC2 BC3

Cost of waste and gas storage

278,549.80 300,000.00 325,000.00 400,000.00 278,549.80 300,000.00 325,000.00 400,000.00 278,549.80 300,000.00 325,000.00 400,000.00

T otal LCC
773,331.86 794,782.06 819,782.06 894,782.06 666,237.76 687,687.96 712,687.96 787,687.96 507,701.37 529,151.57 554,151.57 629,151.57

LCC per 1kw

644,443.22 656,844.68 677,505.83 739,489.30 640,613.23 661,238.43 685,276.89 757,392.27 668,028.12 696,252.07 729,146.80 827,831.01

cost benefit
9,744.00 9,744.00 9,744.00 9,744.00 8,400.00 8,400.00 8,400.00 8,400.00 6,148.80 6,148.80 6,148.80 6,148.80

Payback period (months) 79.36 81.57 84.13 91.83 79.31 81.87 84.84 93.77 82.57 86.06 90.12 102.32

6.61 6.80 7.01 7.65 6.61 6.82 7.07 7.81 6.88 7.17 7.51 8.53
Payback period (years)
Cost of generator
177,650.00 150,000.00 200,000.00 225,000.00 177,650.00 150,000.00 200,000.00 225,000.00 177,650.00 150,000.00 200,000.00 225,000.00

T otal LCC
773,331.86 745,681.86 795,681.86 820,681.86 666,237.76 638,587.76 688,587.76 713,587.76 507,701.37 480,051.37 530,051.37 555,051.37

LCC per 1kw

644,443.22 616,266.00 657,588.31 678,249.47 640,613.23 614,026.70 662,103.62 686,142.08 668,028.12 631,646.54 697,436.01 730,330.75

cost benefit
9,744.00 9,744.00 9,744.00 9,744.00 8,400.00 8,400.00 8,400.00 8,400.00 6,148.80 6,148.80 6,148.80 6,148.80

Payback period (months) 79.36 76.53 81.66 84.22 79.31 76.02 81.97 84.95 82.57 78.07 86.20 90.27

Payback period (years)

6.61 6.38 6.80 7.02 6.61 6.34 6.83 7.08 6.88 6.51 7.18 7.52

76
When cost of solar panels is changed, LCC per 1 kW change from 150,000.00 up to
165,000.00 and payback period change from 7-8 years. Change in inverter cost, result
in 150,000.00 – 153,000.00 change in LCC per 1kW and payback period id almost
remain constant in 7.5 years. Changing the number of hours that panels exposed to
sunlight shows a considerable change in payback period. Payback period shows a
change of 6-12 years.

Changes made to biomass also shows a change in LLC per 1kW and change of payback
period. Changing the cost of waste and gas storage, has resulted a change of LCC per
1kW from 650,000.00 up to 827,000.00 and payback period changes from 6.61 up to
8.53 years. When cost of generator is changed, LCC per 1kW change from 615,000.00
– 730,000.00 and payback period change from 6.61 – 7.51 years.

According to the LCC calculation and results of the sensitivity analysis, in terms of
LCC per 1kW Solar power is more suitable to be used than Biomass. In terms of
payback period, Solar power shows a considerable change when number of hours that
solar panels exposing to sunlight is changed, but biomass gives a much better payback
period. However, Solar generate a considerable power than biomass. Therefore,
considering the benefit each system deliver, solar power is more suitable to be used as
an onsite renewable energy source to electrify the industrial buildings in Sri Lanka.
However, using biomass gives an additional benefit of proper waste management in
the building. Installing biomass plant to generate electricity make your internal and
external building environment clean and contribute towards environme nta l
sustainability. Therefore, despite the cost benefit biomass provide an environme nta l
benefit which might indirectly provide a cost benefit as you are not required to put any
additional effort to manage the waste of the building. Therefore, in environme nta l
aspect biomass is more suitable to be installed in a building

77
4.6 Discussion

It is very important to discuss the findings of a study with the body of existing
knowledge which has not developed yet up to the expected level. Therefore, this
section focus on comparing the existing knowledge with the findings of this research.
According to the literature findings, solar power and wind power can be applied onsite
(Panayiotou et al., 2012; Australian Building Codes Board, 2016). In addition, biomass
is also a resource that can be applied onsite (Huang et al., 2011; Bhanware et al., 2017).
However, according to the expert interviews, only solar and biomass can be used to
generate electricity within the site premises in Sri Lanka. According to the
justifications provided by experts, wind power can be theoretically applied on site but
small scale on site generation of electricity using wind power is not financia lly
beneficial. Apart from that, applying wind onsite is associated with few practical
issues. Wind turbines generate a sound and a rotating shadow that would make wind
power difficult to use onsite for buildings such as hotels and offices. In addition, there
is difficulty in maintaining the system as the system is dynamic, having moving parts.
As a result, there is higher maintenance cost which ultimately result in higher LCC.
Ruangpattana et al. (2011) also states that there is high cost associated with wind
power. On the other hand, currently used wind turbines require a particular wind speed
to start rotating which cannot be expected in areas which are out of the wind belt.
Further, having a suitable structure is important. There are solutions that have
developed for onsite application such as vertical axis wind turbines. However, still
technology has not been developed yet so that wind power can be generated at a low
cost. According to literature findings, wind power can be used as an onsite energy
source to develop a micro grid (Jia, et al., 2014). However, according to findings of
expert interviews, wind power is not a suitable onsite renewable source in Sri Lanka
although wind is applied onsite globally

There is a belief among building owners that usage of renewable energy is not cost
efficient (Turner, 1999). In order to comment on the cost efficiency, a Life Cycle
approach is more suitable (Kale et al., 2016). Three cases were selected for each solar
and biomass to calculate the LCC and associated financial benefit. Life Cycle cost
components were identified using literature and elaborated through expert intervie ws

78
and case studies. LCC was calculated for solar and biomass energy systems
considering 2018 as the base year. According to the calculations sing solar energy is
more beneficial with a LCC of Rs. 150,000 per 1kW while biomass has a LCC of more
than 650,000 per 1kW. On the other hand, solar power has a payback period of 7-8
years while biomass has a payback period of 6-7 years which was highlighted by the
experts as well. However, LCC calculations are uncertain (Tian, 2013). Author further
pointed out that a sensitivity analysis has to be carried out to limit the uncertainty. Cost
of solar panels, cost of inverter and the number of hours that panels receive sunlight
were considered as factors that has to be changed for solar power while cost of waste
and gas storage and cost of generator were considered as factors that has to be changed
for biomass in the sensitivity analysis according to expert interviews. According to the
results of sensitivity analysis also solar power is beneficial in terms of cost. Solar
power can be generated in large scale compared to biomass and there is a great
possibility to obtain a considerable financial advantage. According to Panwar et al.
(2011) power generation from solar power is having a higher initial investme nt.
Experts also pointed out that the initial capital is high for renewable energy systems.
It is evident from the LCC calculations. Building owners has to bear up a higher initia l
capital. A financial benefit can be achieved in the long run.

Both solar and biomass have their own benefits and limitations. Renewable ener gy
systems are environmental friendly (Abdelhamid & Bahmed, 2011).Experts also
hilighted the environmental friendly nature. As identified by Khan & Iqbal (2005) and
expert interviews, main limitation of solar power is its intermittent nature. According
to experts power cannot be generated using solar power at night and under rainy
conditions but biomass has the ability to generate power throughout the day as waste
is generated throughout the day. On the other hand, biomass plant within the building
premises support to waste management. However, every type of waste cannot be
treated biologically to generate power according to expert interviews. Only
biodegradable waste can be used to generate power. Experts pointed out that,
generating power using waste is time consuming. Bio methane is a harmful gas which
is generated from waste which is utilised to generate power. Therefore, in sustainab le
aspects, biomass is also beneficial to be used as an onsite renewable energy source.

79
4.7 Summary

There are plenty of renewable energy sources that can be used to generate power. Out
of them, there are sources which can be applied on site for buildings. According to the
findings of expert interviews, solar and biomass are the sources which are feasible to
be applied on site for buildings. Considering the onsite applicability of solar and
biomass case studies were carried out. LCC of solar and biomass were calculated and
the calculations were followed with a sensitivity analysis in order to eliminate the
stochastic nature of the study. Considering the literature finding and results of expert
interviews and case studies a comprehensive discussion was carried out to address the
various benefits and limitations of solar power and biomass

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 CHAPTER 05
5.0 CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

The aim of the research is to evaluate on the suitability of onsite renewable energy
sources for electrification of industrial buildings in Sri Lanka. A qualitative approach
was followed in order to achieve the aim and related objectives of the research. Expert
interviews and case studies were used as research methods. Renewable energy sources
which can be applied onsite were identified and the applicability of identified onsite
renewable energy sources was discussed in detail based on opportunities, benefits and
limitations of each resource. LCC components were identified through literature,
expert interviews and case studies and LCC was calculated for selected cases of solar
and biomass. Cost benefit was derived based on the tariff rates provided by the CEB.
LCC calculation was followed with a sensitivity analysis to limit the uncertainty of the
study

5.2 Overview of the objectives

Objective 1 - Identify suitable on site renewable energy sources available

This objective was attained through literature findings and expert interviews. Onsite
renewable energy sources which are applied globally were identified through literature
and onsite renewable energy sources suitable to the Sri Lankan context were identif ied
through expert interviews. According to the findings, there are different types of
renewable energy sources such as solar, wind, geothermal, biomass, nuclear, hydro
and wave power. Wind and hydro are the main renewable energy sources used in Sri
Lanka. All identified renewable energy sources cannot be applied onsite. Solar, wind
and biomass are the renewable energy sources which are suitable to be applied onsite.
Onsite applicability of renewable energy sources was obtained based on previous
scientific research. According to the opinion of experts, only solar and biomass are
suitable to be applied as onsite renewable energy sources in Sri Lanka

81
Objective 2 - To identify the on-site applicability of renewable energy sources in
Sri Lanka to generate electricity

This objective was attained based on the expert interviews. After identifying suitable
onsite renewable energy sources, applicability of each renewable energy source was
discussed based on factors to be considered when installing relevant energy systems,
opportunities, benefits and limitations of each resource. According to opinion of
interviewees, only solar power and biomass are the onsite applicable sources in the Sri
Lankan context. Wind power cannot be applied onsite for buildings. Main reason for
the inability of applying wind power onsite is, wind power is financially benefic ia l
when only wind power is generated in large scale. Therefore, small scale onsite
generation of wind power is not carried out in the Sri Lankan context

Objective 3 - To investigate on the concept of Life Cycle Cost

This objective was attained through literature. Main focus of this objective was to
decide the Life Cycle Approach for the research. According to the literature findings,
LCC is the cost that the building/product owner has to bear up due to his ownership.
This research is carried out in client’s point of view, estimating by using engineer ing
procedures where LCC is derived based on the details of the product. On the other
hand, every LCC calculation is stochastic in nature which means that there is always
uncertainty associated with LCC calculations. According to the literature findings a
sensitivity analysis has to be carried out to limit the uncertainty associated with LCC
calculations. Under sensitivity analysis an input is changed to derive the LCC. These
inputs are the factors which have a substantial impact on the LCC

Objective 4 - To identify the Life Cycle Cost components due to onsite renewable
energy usage for electrification of industrial buildings

This objective focused on identifying cost components that are required for the LCC
calculation. Basic cost components were identified through literature. Cost of
equipment, operation and maintenance cost and replacement cost were identified
through literature. Identified basic components were elaborated with expert intervie ws
and case studies. Cost components which were identified through literature review,

82
expert interviews and case studies were considered to derive the cost components that
shall be considered for LCC calculation

Objective 5 - Evaluate benefits gained by using onsite renewable energy for

electrification of industrial buildings

LCC of solar power and biomass were calculated based on cost components that were
identified in objective 4. Actual cost of each cost component were obtained through
case studies. Three cases were selected for each solar power and biomass. Calculated
LCC was discounted considering 2018 as the base year. Generated power in each and
every system were utilised by the industrial buildings. As the generated electricity is
used by the building itself, generated power is a saving for the building as the generated
power is not expected to be obtain from the grid. Therefore, generated power gives
each building a financial benefit which was calculated based on the tariff rates
provided by the CEB. This financial benefit allows the building owner to cover up the
initial investment. Using solar power has given a monthly benefit of Rs. 1680.00 per
kW while biomass gives a financial benefit of Rs. 336.00 per kW.

In terms of initial cost, financial benefit and the payback period, solar power is more
suitable as an onsite renewable energy source which can generate electricity in
industrial buildings. Biomass also is a competitive option but energy wastage, higher
capital, higher operational and maintenance cost, higher payback period and lower cost
and benefit has turned out biomass to stay behind of solar power. However, biomass
is a sustainable option as it supports waste management of the building. Using biomass
supports to achieve environmental sustainability. Using biogas generated from
biomass for electricity generation minimise the emission of bio methane to the external
environment. Therefore, in terms of sustainability aspect biomass is a suitable option
which delivers sustainable benefits

5.3 Recommendations

When LCC of solar power and biomass are compared, solar power is more cost
effective. However, biomass is also a sustainable option. Technology has to be further
developed for solar power and biomass to reduce the cost per kW and the payback
period. Wind power also has a potential to be applied onsite as a power generating

83
renewable energy source. Small scale onsite power generation using wind power is not
cost effective. Therefore, with the available technology wind power is generated only
in large scale. Therefore, there is a requirement to develop the wind power technology
so that wind can be applied as an onsite power generation source. Renewable energy
sources such as geothermal and wave power also can be used to generate electric ity.
But still the technology has to be developed so that those resources can be applied
onsite or offsite for power generation in Sri Lanka with adequate financial feasibility

5.4 Limitations

This research was carried out amongst few limitations. Main limitation is restricting
the study only to electricity generation, ignoring other applications such as heating,
cooling and ventilation. Main reason to comply with such a limitation was inability to
accurately obtain the amount of energy generated. Electrical energy can be measured
in a systematic way, but heat energy or any other form of energy cannot be accurately
measured. On the other hand, research was restricted to industrial buildings and cases
were selected only from the Galle district due to the limitation of the time frame to
execute the research. Calculations would have become slightly different for solar
power as the solar irradiation received is different based on the location.

5.5 Further Research

Removing the existing limitations of the research, further research can be carried out
on following areas

 LCC of using onsite renewable energy for electrification of residential/commerc ia l

buildings in Sri Lanka
 LCC of offsite usage of renewable energy sources to generate electricity in
industrial/residential/commercial buildings
 Other sustainable applications (heating/ventilation) of using renewable energy on site
for buildings

84
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APPENDIX A – OPERATION AND MAINTENANCE COST
CALCULATION OF BIOMASS

Biomass (Case 1) - Discounted Operation and Maintenance Cost

Timing Amount Discounting factor Discounted Amount

1 25,445.87 0.932400932 23,725.76

2 25,445.87 0.869371499 22,121.92

3 25,445.87 0.810602796 20,626.50

4 25,445.87 0.755806803 19,232.17

5 25,445.87 0.704714968 17,932.09

6 25,445.87 0.657076893 16,719.90

7 25,445.87 0.612659108 15,589.65

8 25,445.87 0.571243923 14,535.80

9 25,445.87 0.532628367 13,553.19

10 25,445.87 0.496623186 12,637.01

11 25,445.87 0.463051921 11,782.76

12 25,445.87 0.431750043 10,986.26

13 25,445.87 0.402564143 10,243.60

14 25,445.87 0.375351182 9,551.14

15 25,445.87 0.349977792 8,905.49

16 25,445.87 0.32631962 8,303.49

17 25,445.87 0.304260718 7,742.18

18 25,445.87 0.283692977 7,218.82

19 25,445.87 0.264515596 6,730.83

20 25,445.87 0.246634589 6,275.83

264,414.37

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 Biomass (Case 2) - Discounted Operation and Maintenance Cost

1 21,922.03 0.932400932 20,440.12

2 21,922.03 0.869371499 19,058.39

3 21,922.03 0.810602796 17,770.06

4 21,922.03 0.755806803 16,568.82

5 21,922.03 0.704714968 15,448.78

6 21,922.03 0.657076893 14,404.46

7 21,922.03 0.612659108 13,430.73

8 21,922.03 0.571243923 12,522.83

9 21,922.03 0.532628367 11,676.29

10 21,922.03 0.496623186 10,886.99

11 21,922.03 0.463051921 10,151.04

12 21,922.03 0.431750043 9,464.84

13 21,922.03 0.402564143 8,825.02

14 21,922.03 0.375351182 8,228.46

15 21,922.03 0.349977792 7,672.22

16 21,922.03 0.32631962 7,153.59

17 21,922.03 0.304260718 6,670.01

18 21,922.03 0.283692977 6,219.13

19 21,922.03 0.264515596 5,798.72

20 21,922.03 0.246634589 5,406.73

227,797.21

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 Biomass (Case 3) - Discounted Operation and Maintenance Cost

1 16,705.51 0.93240093 15,576.24

2 16,705.51 0.8693715 14,523.30

3 16,705.51 0.8106028 13,541.54

4 16,705.51 0.7558068 12,626.14

5 16,705.51 0.70471497 11,772.63

6 16,705.51 0.65707689 10,976.81

7 16,705.51 0.61265911 10,234.78

8 16,705.51 0.57124392 9,542.92

9 16,705.51 0.53262837 8,897.83

10 16,705.51 0.49662319 8,296.35

11 16,705.51 0.46305192 7,735.52

12 16,705.51 0.43175004 7,212.61

13 16,705.51 0.40256414 6,725.04

14 16,705.51 0.37535118 6,270.43

15 16,705.51 0.34997779 5,846.56

16 16,705.51 0.32631962 5,451.34

17 16,705.51 0.30426072 5,082.83

18 16,705.51 0.28369298 4,739.24

19 16,705.51 0.2645156 4,418.87

20 16,705.51 0.24663459 4,120.16

173,591.11

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 APPENDIX B – EXPERT INTERVIEW GUIDELINE

COVERING LETTER FOR INTERVIEW GUIDELINE

[name of researcher],
Level 4, Undergraduate,
Department of Building Economics,
University of Moratuwa.
Dear Sir/Madam,
Expert Interview for Dissertation on “Impact of using on site renewable energy on
Life Cycle Cost of Commercial Buildings”
I am a final year undergraduate at University of Moratuwa, following B.Sc. (Hons) in
Quantity Surveying. Currently, I am involved in a research based on the above topic
and the following expert interview guideline allows to collect information required to
achieve objectives of the study
I would like to thank you for your feedback and dedicating time for this research. I
assure you that the information collected through the interview will be used only for
research purposes and confidentiality of the data will be maintained at all times. If you
are interested in knowing the outcome of this research, it would be my pleasure to
share it with you.
Thanking you,
Yours faithfully,
[name of researcher],
Final year undergraduate
Department of Building Economics
University of Moratuwa
Email: ……………………… | Tel: +94 …………….

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 EXPERT INTERVIEW GUIDELINE

Information of the respondent

1. Profession: - ……………………………………………...........................
2. Designation: - …………………………………………………………….
3. Organisation Type: - ……………………………………………...............
4. Experience in the industry: - ………………………………………………

Questions
1. What are the renewable energy sources applicable on site for buildings ,
and what are the criteria used to determine the on-site applicability of
renewable energy sources?

Renewable energy On site Criteria used to determine the on-site applicability

sources renewable
energy
sources
i. Solar 

ii. Wind 

iii. Geothermal

iv. Biomass 

v. Nuclear

vi. Hydro

vii. Wave power

106
 2. What are the renewable energy sources applicable on-site for commercial
buildings in the Sri Lankan context?

On site renewable energy sources identified Onsite renewable energy sources applicable
to Sri Lankan commercial buildings
Solar 
Wind
Biomass
Hydro
…………………
…………………
…………………

3. Why above identified on site renewable energy sources are applicable to

the Sri Lankan Commercial buildings?

On site Applicability Reasons/justifications

renewable to Sri Opportunities Limitations Benefits
energy Lankan
source Context
Solar  Sri Lanka receive Cannot generate Pollution free
abundant sunlight power at night
Cost of power Inability to power Can be used for rural
generation is generation electrification
declining due to continuously due to
technological intermittent nature
advancements
Offer wide range of
uses such as water
heating, cooking and
crop drying

107
 On site Applicability Reasons/justifications
renewable to Sri Opportunities Limitations Benefits
energy Lankan
source Context
Wind Sri Lanka having Inability to power Can generate power at
sufficient wind generation night
resources continuously due to
intermittent nature
Well distributed and Requirement of a Does not produce
can be obtained in higher capital greenhouse gases
plenty
Can overcome the
difficulty in extending
power lines
Contribute in reducing
atmospheric
degradation

Hydro Having required Over extraction of Durable

Power water bodies water bodies to power
generation can affect
sustainability of the
society
Environmentally
sustainable

Biomass  A wide range of Environmentally

biomass sources are beneficial
available
Energy efficient

108
 On site Applicability Reasons/justifications
renewable to Sri Opportunities Limitations Benefits
energy Lankan
source Context

4. What are the cost elements that should be considered in calculating the
Life Cycle Cost of on-site renewable energy systems?

Relevant literature findings

 Life Cycle Costing can be carried out in client’s and manufacturer’s

point of view. (This research intend to focus on client’s point of view)

 Identified cost elements

a) Cost of system construction

b) Repair cost
c) maintenance cost
d) replacement cost

On site Additional Cost components

renewable
source
Source 1

Source 2

Source 3

Source 4

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 APPENDIX C – GUIDELINE FOR CASE STUDY

GUIDELINE FOR THE CASE STUDIES

SECTION 1 – GENERAL PROJECT DETAILS

1. Project Type:
2. Location:
3. System Capacity:
4. Year of installation:

SECTION 2 – SOLAR POWER

Identify the cost of following cost components

Following cost components were identified through existing literature and expert
interviews. Additional cost components can be further included for the following
breakdown

Cost element Quantity Unit Rate Amount

Cost of Equipment

 320 W panel
 Inverter
Transport
Fixing cost
Repair Cost
Replacement Cost
Operation and maintenance cost

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SECTION 3 - BIOMASS

Identify the cost of following cost components

Following cost components were identified through existing literature and expert
interviews. Additional cost components can be further included for the following
breakdown

Cost element Quantity Unit Rate Amount

Material and equipment cost

 Waste and gas storage

 Generator
Transport Cost
Labour cost
Replacement Cost
Operation and Maintenance Cost

111