The Influence of Photovoltaic Self-Consumption on Water Treatment Energy Costs: The Case of the Region of Valencia

Abstract

Energy consumption is one of the principal components of the operative costs incurred by providers of water services, both financial and environmental. Fortunately, in recent years solar panel technology has improved substantially, and photovoltaic self-consumption has become a tool that can reduce the costs of water reuse and other water services. Regions with a scarcity of water resources make a considerable use of non-conventional sources, consuming a significant amount of energy, which has a high financial and environmental cost and compromises the sustainability of the water supply. This research analyses the possibility of replacing part of this energy with self-consumption through photovoltaic panels based on data obtained for the Region of Valencia in order to analyse the impact of energy substitution on energy costs. Performing a Cost–Benefit Analysis, self-consumption projects require an electricity market price of between 0.14 and 0.18 EUR/kWh, so in financial terms it is not a particularly attractive alternative. However, the avoided greenhouse gas emissions have a high value, and including them in the calculations, the price needed to be in feasible amounts of 0.04–0.10 EUR/kWh for a small installation and 0.02–0.08 EUR/kWh for a large one. In other words, photovoltaic self-consumption is still today an alternative with financial difficulties, but the associated environmental benefit justifies public intervention as it is a beneficial energy alternative in a context of high greenhouse gas emissions.

1. Introduction

The climate conditions of our planet are becoming increasingly adverse. And there is no doubt that the pollution that we have generated over the years is significantly affecting our way of life and how the different economic activities of our society are carried out. Therefore, one of the key concepts on which the way in which we address this situation should be based is the circular economy. The fundamental pillar of the circular economy consists of minimising the generation of waste through the constant reuse of materials or products. Fossil fuels form part of a linear economy as they are extracted, used to generate energy and give rise to one or several waste products that affect the natural environment. However, renewable energies are more consistent with the circular economy concept as they generate much less pollution and their materials can be reused [1]. In addition, renewable energies, particularly in the case of photovoltaic solar panels, represent a strong economic stimulus, thanks to the generation of business and, therefore, employment. This is highly relevant in a context such as the current situation, where the pandemic has a strong economic impact [2].

In the past, all of these advantages were offset by two strong disadvantages: the low level of efficiency of the solar panels and the high cost generated by their installation and maintenance. However, the technology has improved over time [3], reducing their cost and improving their efficiency significantly [4,5], which explains the recent increase in the capacity installed and the forecast that this growth will continue [6]. Of course, energy generation and, therefore, unit costs depend on various aspects, such that the efficiency of a solar panel installation can vary from region to region. It is therefore essential to have some general criteria that are useful in determining the feasibility of solar power generation. This includes both financial and environmental aspects, so that the characteristics of the project can be as precise as possible. As the potential for solar energy in Spain is very high, in recent years improvements in the installation of solar panels have made it possible to reduce the greenhouse gas emissions and to generate business and employment [7]. Nevertheless, within this recent context, in which there has been a significant improvement in the feasibility of projects related to the use of solar energy, this energy source has not been developed sufficiently, as major barriers for its development still remain [8]. Specifically, we can find bureaucratic barriers as the administrative procedures involved in granting licenses are very slow. Regulation can lead to cost increases of up to 50% for solar power generation projects [5]. However, these types of projects usually suffer from a lack of support, in both regulatory and financial terms [8].

Even if these external problems of PV self-consumption projects were eliminated, the question of their financial competitiveness would still remain. Although there is a continuous reduction of costs and constant efforts to do so [9,10], the cost and flexibility of traditional electricity supply is an interesting alternative. However, this is the point of view of economic activity, but as a society we must also take care of the natural environment, which is why, even in the presence of significant barriers, electricity production by solar panels is increasing. This justifies the presence of incentives in a large number of countries, as the emission reductions achieved present a value that the public sector is responsible for pursuing [11]. Thus, support is available to individuals, companies and public entities, and there are different types of photovoltaic installations, mainly depending on their location. The most common types are ground-mounted and rooftop installations, so that all types of electricity consumption can be replaced. This technology is being adopted in more and more households with the aim of reducing electricity bills and moving towards a cleaner supply [12,13]. However, there is still a lot of potential to be tapped [14], as the costs of a PV self-consumption project are incurred at the beginning and the savings generated are spread over the lifetime of the installation [15,16], which amounts to 25–30 years [17,18]. A new type of installation, which consists of locating the installation on a body of water, is also currently under consideration. This alternative has some environmental benefits [19] and achieves very competitive generation costs [20], although it also has some environmental impact and the space available is limited [21].

One of the sectors of society with a strong link to and dependence on electricity supply is the water sector. The cost of energy is very relevant for the supply of a basic good such as water, as shown by the increase in the energy cost of irrigation in the search to minimise water consumption [22] or the cost of other water services such as water transfers [20], reuse [23,24] or desalination [25]. Energy costs are particularly important in the latter two cases, where electricity supply accounts for more than half of the operating costs [24,25]. This implies that the water sector, which is fundamental to all of society, is very vulnerable to the energy sector and that the energy sector must be robust and competitive in order not to compromise the supply of water and many other services offered by society.

The current situation is, in short, that great efforts are being made to ensure that a technology with high barriers is consolidated in society with the aim of achieving an environmental benefit and supply stability. For this reason, the government of the Region of Valencia recently modified the bureaucratic situation of these projects, making the procedures more agile and reducing costs provided that certain conditions are fulfilled [26]. In this way, the objective is to soften the bureaucratic restrictions and regulations so that, together with the constant technological improvements and cost reductions, they can contribute to the better use of the potential of this energy [27]. However, it should be remembered that the impact of the renewable energy systems is not zero and their design should be optimised so that their impact on the environment is minimal [28].

The recent bureaucratic change in the Region of Valencia is coupled with the economic incentives that already exist. First, the regional government offers two different types of subsidies: a deduction in income tax (IRPF) and a direct subsidy to contribute to financing the project [29]. On the other hand, the local councils have the capacity to subsidise taxes, namely the property tax (IBI) and the municipal tax on buildings, installations and infrastructure (ICIO), which are added to the regional income tax (IRPF) subsidy [29]. However, this is a decision for each local government, so the subsidies vary from place to place. In this way, towns with fewer than 10,000 inhabitants do not have the same subsidies as the larger towns, although not all of the towns with more than 10,000 inhabitants apply these subsidies [29]. In short, these subsidies, together with the bureaucratic relaxation introduced by the regional government, have attempted to promote the development of renewable energy sources. However, it has been recently found that the public incentives for renewable energies are insufficient to make the most of their potential [4,8].

As we have already seen, in recent years, the technological improvements and the reduction in costs have significantly contributed to promoting the use of solar energy. We can observe different projects aimed at harnessing this energy, e.g., for water purification [30] or for water pumping [31,32], requiring a feasibility analysis. Utmost care should always be taken in the design of each project, as the existence of different technologies enables the installation to be adapted to the conditions of the region and achieve optimum performance levels [33]. There are projects aimed at integrating energy generation with greenhouses whereby the energy can be used to treat the wastewater generated by these facilities [30]. It is also common practice to install photovoltaic panels in order to provide energy for the water pumping system to supply the population [34] or to supply energy to water transfer systems [35]. Furthermore, it should be noted that the Empresa Pública de Saneamiento de Aguas Residuales de la Comunidad Valenciana (EPSAR) (Public Wastewater Treatment Body of the Region of Valencia) has been investing in the installation of solar panels for some time in order to reduce the consumption of fossil fuels in the wastewater treatment activity which consumes a high amount of energy [36]. As well as contributing to reducing pollution and generating economic activity, these projects can also help to promote the training of those participating in them, as a diverse range of knowledge is required which can be shared among the participants [37]. This issue is highly important as a lack of knowledge can slow down the development of this energy source, particularly when it is the public who is unaware of its advantages, as they will not consider its installation [38]. This, together with the low price of conventional energy (energy is not cheap for small consumers, but it is for large consumers) and the bureaucratic and regulatory restrictions, affects the evolution of the installed capacity and, therefore, contributes to wasting the potential of solar energy. In any event, the projects based on the use of this type of energy require an efficient design in order to constitute an economically feasible alternative [39]. This is due to the installation and maintenance costs which can be very high. Therefore, a suitable design, together with the constant technological improvements in the sector, will help maximise the efficiency of the solar panels [40]. In short, we can say that the use of solar energy is becoming an increasingly more interesting alternative due to the constant cost reductions, the technological improvements and the public incentives. This is evident in the existence of an increasing number of projects that use it. It is now becoming a magnificent alternative for supplying energy to different water services, which are so necessary in regions such as Valencia which have high energy consumption in their water services.

Due to the energy cost of wastewater treatment in this region, the objective of this study is to analyse the energy cost of the wastewater treatment stations (EDAR by their Spanish acronym) and the installation of photovoltaic panels, so as to be able to determine the feasibility of these types of projects. This is a matter of great interest, as finding that a clean energy supply alternative is profitable in financial terms is a major progress. To this financial valuation, the value of the greenhouse gas emissions that would be avoided by self-consumption has been added, giving a more complete picture of the situation. The objective is not limited to providing information on a local scale, but, on the basis of the information available for the Region of Valencia, comments will be made that are valid in other situations. In order to fulfil this objective, after this introduction, the data and the methodology used are explained, followed by the results, discussion and conclusions obtained.

2. Materials and Methods

2.1. Materials

The data that have been used to fulfil the proposed objective have been drawn from different sources. First, the data on energy consumption and the economic cost of energy of the wastewater treatment plants of the Region of Valencia have been provided by the EPSAR and contain key factors such as the amount of water treated, energy consumption and the cost of the contracted load and energy consumed. The information on energy cost has been provided directly by the entity, so it is not accessible via the internet, but the tables and the text of the article contain all the information necessary for the analysis. The data on energy consumption for all wastewater treatment plants are taken from the EPSAR website. With respect to the costs of installing panels for self-consumption, these data have been provided by Enerficaz, a company of the sector, which has prepared two budgets depending on the size of the installation. These data include information regarding the investment necessary, the financing or operation and maintenance costs and are shown in full in the results section (Section 3). When assessing the financial return on investment that self-consumption would entail, the Spanish interest rate in November 2022 is used, which is the latest available from the Bank of Spain at the time of the analysis. In particular, the interest rate for loans to non-financial corporations of up to EUR 250,000 and repayable over 5 years, which amounts to 4.52%, is used. This value is of great importance, as it affects both the cost of financing and the value of future financial benefits, so that a variable outside the control of the energy consumer has a major impact on the ability to make an energy substitution. In other words, high interest rates are a barrier to energy transition, which requires large investments and offers benefits spread over time.

In addition to these data, data obtained from the Red Eléctrica and EPSAR [36] websites are also available. The former consists of the evolution of the electricity price (EUR/kWh). These data are very useful, as the value of the electricity generated by the solar panels is the cost of supply through the grid, which is related to the wholesale market electricity price that is determined on a daily basis. The EPSAR data are more specific and focus on greenhouse gas emissions from wastewater treatment plants in the Region of Valencia. Specifically, the EPSAR report for the year 2021 [36] indicates that in that year 21.1% of the electricity consumed in Valencia’s regional wastewater treatment plants came from renewable sources, avoiding the consumption of 3544 tonnes of oil equivalent and the emission of 18,849 tonnes of CO₂ equivalent. The remaining 78.9% of electricity came from traditional supply, amounting to 154.85 GWh and associated emissions of 38.31 thousand tonnes of CO₂ equivalent. Dividing these emissions between the energy consumed through traditional supply results in emissions of 0.247 tonnes of CO₂ equivalent for every 1000 kWh consumed. Data from Red Eléctrica indicate that the average emissions per kWh in 2020 in Spain amounted to approximately 0.15 kg, which is significantly lower. These emissions imply the use of different sources of electricity. In this case, it is not possible to know exactly which energy source we would be substituting, so the above values will be used as a reference, but the emission reduction could be expected to vary significantly depending on the source substituted. From the Economic Appraisal Vademecum of the European Commission [41], the value of these emissions can be known, as this document includes the shadow price of each tonne of CO₂ for each year until 2050. In the calculations of the environmental benefit, all these amounts are used to estimate the value of the emissions that would be avoided with self-consumption. However, given the impossibility of knowing precisely the amount of emissions avoided, Red Eléctrica’s 0.15 kgCO₂/kWh would be the minimum emissions reduction, and EPSAR’s 0.247 kgCO₂/kWh would be the maximum reduction. Finally, the shadow prices of the emissions are in 2016 euros, so they have been updated based on inflation in Spain from January 2016 to December 2022, which amounts to 19.6%.

2.2. Methods

The methodology followed for the analysis is calculations based on the available data. These calculations include everything necessary to provide the financial costs and benefits of PV self-consumption, such as the costs of investment, financing, operation, maintenance, replacement of components with a shorter lifetime than the panels and the price of electricity. On the one hand, in the analysis it has been considered that the energy cost (both electricity price and consumption) of a wastewater treatment plant is constant over time, so that by multiplying it by 25 we obtain the energy consumed and its cost in euros for the useful life of the wastewater treatment plants. This has been conducted because of the great difficulty of predicting both variables in the future, as they have recently undergone large variations. On the other hand, the cost of power generation by solar panels is calculated, also for a period of 25 years, from the budgets obtained, adding up the investment, financing and operation and maintenance costs for 25 years of operation. In this case, in order to obtain the interest derived from the financing obtained (4.52% interest rate as explained in the previous section), an additional calculation has been made to obtain the debt through the PMT (Payment) formula of Microsoft Office Excel, using the investment to be made, the interest rate and the term of repayment. The costs of each alternative are shown disaggregated in Section 3. The main limitation in this respect is that the availability of land for the installation and its cost are unknown. Of course, the energy cost of wastewater treatment plants is not constant over time, and neither is the electricity production of photovoltaic panels. For this reason, in addition to analysing the risk, a sensitivity analysis is also shown to determine the vulnerability of these investments to the evolution of the price of electricity and the loss of production of the panels.

The methodology used to evaluate these investment alternatives is the Cost–Benefit Analysis, a technique that allows encompassing financial and non-financial issues in order to carry out a complete evaluation that is useful for a complete and rational decision making [42,43]. The result provided by the Cost–Benefit Analysis is the Net Present Value, which is calculated according to the Formula (1):

$$\mathrm{NPV}=-I+\frac{B_1}{\left(1+i\right)}+\frac{B_2}{{\left(1+i\right)}^2}+\dots +\frac{B_n}{{\left(1+i\right)}^n}$$

(1)

where NPV is the Net Present Value, I is the investment to be made at time 0, B is the benefits minus the costs for each period, i is the discount rate and n is the number of periods, which is equivalent to the 25-year lifetime of the solar panels.

In this case, the financial value of the energy production of the solar panels is the market price of the energy. The benefit minus costs for each period is calculated as the difference between the cost of generating electricity using solar panels and the market price of electricity. Since a large part of the cost is the initial investment, during the years of repaying the financing obtained, the profit for each period is the market value of the electricity generated minus the financing and operation and maintenance costs. After repayment of the debt, the profit for each period is the market value of the electricity minus operating and maintenance costs. Once this calculation is done, the Net Present Value only requires substituting the values in Formula (1). Production and consumption occur over 25 years, so future savings must be discounted to their present value. This is accomplished at the same interest rate that has been used to obtain the interest on the financing of the investment, 4.52%, which is the latest consolidated value according to Bank of Spain data at the time of the calculations. The inclusion of the interest rate to discount the value of future earnings means that they are not overvalued in a context of recent increases in both prices and interest rates. In this case, a fixed value is used because of the difficulty of predicting future rates, but it is worth noting that this is a highly significant variable in an analysis in which 25 years’ future profits are discounted and interest is paid on financing. Thus, it is possible to obtain the financial Net Present Value (NPV) of the investment. The other possible value derived from photovoltaic self-consumption is the environmental benefit from the reduction of greenhouse gas emissions. From the EPSAR and Red Eléctrica data, it is possible to know the potential emission reduction, which can be given a value based on the shadow prices established by the European Commission [41]. In this case, a discount rate for future environmental benefits is also used, which amounts to the 3% established by the Economic Appraisal Vademecum as a general value. In other words, the formula (1) is again used to calculate the potential environmental benefit, but instead of financial benefits we rely on the value of emissions (quantity per shadow price based on recent data and reports). This makes it possible to obtain the value in euros of the reduction in greenhouse gas emissions and combine it with the financial result, thus obtaining a complete picture of the possible investments in photovoltaic self-consumption.

3. Results

3.1. Energy Consumption of Wastewater Treatment

Unfortunately, the information regarding the economic cost derived from energy consumption is not available in the majority of cases, but there are data about certain specific cases, and other studies have addressed the issue of the energy efficiency of these facilities and their cost such as studies on the energy efficiency of Valencian wastewater treatment plants [23,44] or the importance of electricity tariffs on the cost of water treatment [24]. These studies highlight some interesting aspects. For example, there is a clear relationship between the energy consumption of wastewater treatment plants and the volume of wastewater treated, that is, the size of the treatment station. In this sense, the larger the volume of wastewater treated, the less energy consumed. Therefore, due to economies of scale, the average energy consumption is lower in the larger facilities [26]. Furthermore, the majority of the wastewater is treated at these large facilities. Therefore, increasing the energy supply from renewable sources (21.10% of the energy required is already supplied by these sources) in these facilities would be a good option given the higher efficiency of their operations [36]. Another interesting aspect is the energy efficiency of the different plants, taking into account that continuous efforts are made to improve the efficiency of these facilities [44]. This is one way to reduce the energy needs of the activity, but it is also important to consider this in the design of the solar panel installation carrying out the supply because, if not, in the future the capacity installed could go to waste, although the energy could always be used for other purposes.

Therefore, analysing energy consumption can be complicated, but it is fundamental for determining the feasibility of the projects aimed at supplying energy through renewable sources. Therefore, the data summarised in

Table A1. Basic characteristics of the EDAR of the Region of Valencia in 2018. Source: Own elaboration based on EPSAR data.

Group	Number of EDAR	Population Served (he)	Electricity Consumption (kWh/m3)	Project Flow Rate (m3/day)	Installed Power (kW)	Suspended Solids Yields (%)	Biological Oxygen Demand Yields (%)	Chemical Oxygen Demand Yields (%)
Until 200 he	105	96.48	1.21	106.14	13.48	87.45	92.67	87.75
Until 400 he	64	286.28	0.76	294.02	29.83	91.06	94.73	89.41
Until 600 he	55	495.91	0.68	242.07	24.51	93.00	95.95	91.78
Until 1000 he	55	766.16	0.65	371.44	29.44	90.38	93.49	88.96
Until 1600 he	39	1266.00	0.66	651.97	62.53	93.18	95.69	90.67
Until 4000 he	50	2551.90	0.64	1105.00	93.04	93.12	95.54	91.14
Until 13,000 he	48	7168.31	0.65	3409.10	271.25	95.06	96.54	92.60
Until 125,000 he	57	39,068.40	0.57	14,243.30	980.68	95.58	96.49	92.75
Until 200,000 he	6	164,596.00	0.49	50,166.67	2129.00	96.67	98.00	94.00
Until 500,000 he	3	308,637.67	0.28	87,373.33	2510.33	95.00	97.67	93.00
Until 1,000,000 he	1	852,799.00	0.23	200,000.00	15,232.00	97.00	98.00	94.00
Total	483	11,619.25	0.77	3898.57	247.22	91.84	94.89	90.35

clearly show the relationship between the size (measured in this case in population equivalent) and the energy consumption per cubic metre of treated water. Naturally, in relative terms, the small plants consume the most, while the larger plants consume less than the average. The average consumption is 0.77 kWh per cubic metre, which is far removed from both the smallest and largest plants. However, we should take into account that the high number of small-sized plants increases this average as it is not weighted. Therefore, if we divide the total energy consumption by the total cubic metres of wastewater treated, we obtain an average of 0.38 kWh/m³. The difference is significant, as the value of 0.77 is higher than almost all of the groups while 0.38 is below the majority of them. As we can observe, although the average energy cost falls as the size of the plant increases, we cannot consider the plants to be efficient until the penultimate group, as at this point the energy cost is 0.28; that is, for the first time it is below the average. However, there are only four EDARs that are larger than this size, so the majority of plants suffer from a lack of energy efficiency. However, we should also take into account that they treat lower volumes, and this makes the task more difficult. This issue has led to the proposal to concentrate the water flows in order to benefit from the economies of scale and reduce both economic and environmental costs [23]. These data show similar conclusions to those obtained previously [23], although with some variations. First, it is noteworthy how energy consumption per cubic metre, in general, is lower, but the difference in the smallest-sized group is significant in terms of both energy consumption (1.94 in the afore-mentioned study and 1.21 in this study) and the number of treatment stations (54 in the afore-mentioned study and 105 in this one). Similarly, in this study we find that both the other small-sized plants and the large plants have a lower average energy consumption than that of a few years ago. On the contrary, the plants in the intermediate groups have a relatively higher consumption than that obtained previously [23].

Figure A1 shows the energy consumed by the different treatment plants depending on their size. We can clearly see the relationship and how only the larger-sized facilities are efficient. Straight lines have also been included to represent the weighted average consumption and the average consumption, enabling us to clearly see the large number of plants that exceed these quantities, particularly in the case of the weighted average consumption. In accordance with Table A1, in Figure A1 we can see the relationship between consumption and size, as the larger-sized plants have a lower consumption per cubic metre than the rest. However, we should point out that the available data contain a small number of medium-sized plants with very small or even zero consumption levels. In any case, we can clearly observe that there is a wide margin for improvement in terms of energy efficiency. Given the high demand for energy, stimulating supply through renewable sources can have significant benefits.

3.2. Financial Cost of Energy Consumption

On the other hand, this energy consumption has an associated cost, which is one of the most important, or even the most important, when analysing the operating and maintenance costs [24]. For this reason, the measures aimed at organizational energy efficiency and organizational economic cost and the pollution generated are highly useful. Furthermore, there have recently been significant price increases which, together with the previously mentioned reduced cost of solar energy, make the installation of solar panels an increasingly interesting alternative. In fact, the economic cost of supplying electrical energy represented 44% of total costs in 2009, and after three years of increases it reached 56% in the year 2012 [24]. This, in connection with the considerable amount of energy consumed by the different water services (this study contains different data from the wastewater treatment plants of the Region of Valencia, but also other services such as desalination or water supply also require energy), implies that it forms part of water resource management and that there is much room for improvement. As previously mentioned, the data on the economic cost of energy incurred by water services are not information that is usually published. However, the EPSAR does have this information for some of the treatment plants in the Region of Valencia. This organization informed us that, in general, private companies manage the facilities; therefore, each company manages the energy supply on their own account. Bearing in mind that there are 30 different companies that manage wastewater treatment plants which are distributed across the whole region with diverse characteristics, it is logical to think that the price could vary significantly between the different EDARs.

Without going into too much detail,

Table 1. Data on the energy cost of the Ademuz and El Campello wastewater treatment plants. Source: Own elaboration based on EPSAR data. Note: the contracted power price is rounded.

Variable	Ademuz	El Campello
Contracted power (kW)	480	1200
Contracted power Price(EUR/kW)	7.34	3.11
Contracted power Cost (EUR/year)	3522.38	3731.85
Energy Consumed (kWh/year)	85,748	186,643
Unit Price (EUR/kWh)	0.11	0.07
Cost of Consumption Term (EUR/year)	9286.51	12,345.68
Total Cost (EUR/year)	12,808.89	16,077.54

shows how the smaller-sized plant has a higher price per kW and per kWh than the bigger facility, although their final price is lower due to the size. This is very important, as the difference between the two plants studied is significant. The El Campello plant has a contracted power and energy consumption more than double that of the Ademuz plant, but the unit price paid for both items is much lower. This justifies that the EDARs of the region are grouped into exploitation systems so as to reduce their operating costs. However, these data are those in effect at the beginning of 2021, and since then the price of electricity has increased significantly, so it is worth assessing this change. As Figure A2 shows, electricity prices were relatively stable from January 2014 to April 2021, but after that period there were sharp increases. This price is currently decreasing and stands at 0.09 EUR/kWh in January 2023. This volatility of electricity prices is directly related to the costs of wastewater treatment plants. In other words, the current energy problem is not only about pollution arising from the way energy is generated, but the uncertainty about its financial cost is strongly affecting fundamental activities such as wastewater management. Additionally, aspects such as the quality of the wastewater entering the system, the quality required upon leaving the facility, the amount of wastewater treated or the exploiting company are very specific aspects that affect the management of the installations. Hence, the objective of this research is not to determine the feasibility of the installation of solar panels for these specific cases, but it seeks to establish a general framework applicable for future specific cases based on the real information available.

3.3. Feasibility of Self-Consumption Using Photovoltaic Solar Panels

As an alternative energy source, given the current situation, we have evaluated the possibility of obtaining an energy supply through solar energy. In this respect, a company of the sector has provided us with two budgets with details about the cost and characteristics of two facilities of different sizes. The first would be capable of generating approximately 10,010 kWh per year and the second around 147,000 kWh. It should be noted that, while the 10,010 kWh installation is designed to meet an energy consumption of 85,748 kWh, the 147,000 kWh installation only involves meeting 78.76% of a consumption of around 186,643 kWh. This information for two very different sizes of facilities enables us to assess the possibility of installing solar panels for both low and high levels of energy consumption. As we can see in

Table 2. Characteristics of two energy self-consumption alternatives. Source: Own elaboration based on Enerficaz budgets.

Installation 10° Inclination
PV power requirement (kWp)	7.2	100
PV energy obtained (kWh/year)	10,010	147,000
Energy produced per m2 PV module (kWh/m2 per year)	0.272	0.272
Surface area required for installation (m2)	78	1600
Investment (EUR)	9000	61,525
Other costs over the lifetime of the photovoltaic panels (EUR)	12,182	174,150

, there are significant differences between the two projects. Specifically, the large facility would require a higher power requirement, a larger surface and a bigger total cost. In other words, the size of the installation is key when economies of scale are present. This section analyses the financial viability of the small plant at the Ademuz wastewater treatment plant and the large plant at the El Campello facility.

Table 3. Results of the proposed installations at the Ademuz and El Campello wastewater treatment plants considering constant prices. Source: Own elaboration based on Enerficaz budgets and EPSAR data.

Variable	Ademuz	El Campello
Budget for the installation (EUR)	21,182.00	235,675.00
Total interest on financing (EUR)	2523.40	28,075.40
Total maintenance (EUR)	2250.00	15,381.25
Maintenance per year (EUR)	90.00	615.25
Energy produced per year (kWh)	10,010.00	147,000.00
Part of the consumption that satisfies (%)	11.67%	78.76%
Total price of the satisfying consumption (EUR)	1101.10	10,290.00
Yearly balance up to the payment of the debt for financing (EUR)	506.42	4059.67
Annual savings (EUR)	1011.10	9674.75
Year in which investment is amortised and profits start to be made	23.45	27.26
Unit price of self-consumption energy (EUR/kWh)	0.10	0.08
Energy price traditional supply (EUR/kWh)	0.11	0.07

shows the results obtained from the two proposals made by Enerficaz and the data available for the Ademuz and El Campello plants. When analysing two different cases with their own photovoltaic solar panel installations, the great difference in terms of energy price and cost of self-consumption stands out. The Ademuz installation has a lower consumption and pays a higher unit price, which is due to the importance of economies of scale, which can also be seen in the higher unit cost of the energy generated by the PV panels. Therefore, the size of both types of installation is crucial in the analysis. In general terms, the investment made, in addition to the rest of the costs, allows for annual savings by reducing the demand for external energy. Focusing on the Ademuz plant, an annual saving of around EUR 1000 can be obtained, which allows the total expenses (initial investment, interests and maintenance) to be recovered in almost 24 years. This is possible because, with all costs included, the unit cost of self-consumption is around 0.10 EUR/kWh, compared to 0.11 EUR/kWh for grid supply. The case of El Campello is similar but on a larger scale. However, in this case the economies of scale of the wastewater treatment plant outweigh those of the PV installation, resulting in the cost of self-consumption being slightly higher to that of traditional supply. There is an advantage from the reduction of vulnerability to the market price of electricity, but the situation of financial losses or low financial benefits in case of price stability is clear. The main disadvantage lies in the installation surface, as the wastewater treatment plants have limited space to locate the panels, which implies not only an additional financial cost that depends on each specific case but also the occupation of land that cannot be put to any other productive or environmental use.

However, this initial comparison of alternatives does not take into account the interest rate, which is relevant when the financial income will be in the form of savings over 25 years, nor does it take into account the environmental benefit of reducing greenhouse gas emissions. Thus, a Cost–Benefit Analysis is also carried out based on the data in Table 2 and Table 3 and the interest rate (4.52%) to calculate the financial Net Present Value. On the other hand, the environmental benefit is calculated on the basis of the amount of emissions avoided by self-consumption at the price established by the European Commission in its Economic Appraisal Vademecum, considering the social discount rate of 3% established in the same European document. As part of the Cost–Benefit Analysis, a sensitivity analysis is carried out to determine the vulnerability of this alternative to possible variations in the price of electricity and emissions reductions, two components about which there is some uncertainty.

First,

Table 4. Financial Net Present Value of the photovoltaic self-consumption project for the Ademuz wastewater treatment plant. Source: Own elaboration with data from the Ademuz plant, the budget for the self-consumption project and the interest rate obtained from the database of the Bank of Spain.

Financial Net Present Value	Energy Generated (% of Project Energy)
Market Price of Electricity (EUR/kWh)	90	95	100
0.02	−22,061.84	−21,913.71	−21,765.59
0.04	−19,395.58	−19,099.33	−18,803.08
0.06	−16,729.33	−16,284.95	−15,840.58
0.08	−14,063.07	−13,470.57	−12,878.07
0.1	−11,396.82	−10,656.19	−9915.57
0.12	−8730.56	−7841.81	−6953.06
0.14	−6064.31	−5027.43	−3990.55
0.16	−3398.05	−2213.05	−1028.05
0.18	−731.80	601.33	1934.46
0.2	1934.46	3415.71	4896.96
0.22	4600.71	6230.09	7859.47
0.24	7266.97	9044.47	10,821.97
0.26	9933.22	11,858.85	13,784.48
0.28	12,599.48	14,673.23	16,746.99
0.3	15,265.73	17,487.61	19,709.49

and

Table 5. Financial Net Present Value of the photovoltaic self-consumption project for the El Campello wastewater treatment plant. Source: Own elaboration with data from the El Campello plant, the budget for the self-consumption project and the interest rate obtained from the database of the Bank of Spain.

Market Price of Electricity (EUR/kWh)	Energy Generated (% of Project Energy)
	90	95	100
0.02	−273,717.50	−271,542.23	−269,366.96
0.04	−234,562.70	−230,212.16	−225,861.63
0.06	−195,407.90	−188,882.10	−182,356.30
0.08	−156,253.10	−147,552.04	−138,850.97
0.1	−117,098.31	−106,221.97	−95,345.64
0.12	−77,943.51	−64,891.91	−51,840.31
0.14	−38,788.71	−23,561.85	−8334.98
0.16	366.09	17,768.22	35,170.35
0.18	39,520.88	59,098.28	78,675.68
0.2	78,675.68	100,428.35	122,181.01
0.22	117,830.48	141,758.41	165,686.34
0.24	156,985.28	183,088.47	209,191.67
0.26	196,140.07	224,418.54	252,697.00
0.28	235,294.87	265,748.60	296,202.33
0.3	274,449.67	307,078.67	339,707.66

show the financial Net Present Value of both projects. The first one refers to the small plant, and the second one refers to the large plant. At first glance, it can be seen that the vulnerability to electricity prices is very important, since with very high prices the value obtained is high, but at present it is really difficult to obtain a financial return from these projects. The small installation would need a price of at least 0.18 EUR/kWh to be able to pay back the investment, which is double the price in January 2023. The large installation shows a slightly better situation, as a price of 0.16 EUR/kWh would be sufficient, but it is still a long way from making the investment profitable. Given the recent evolution of energy prices, it is possible that the high prices of the last two years were only temporary and that the trend is now returning to the previous one, which would make it impossible to recover the investment. The result is therefore a high vulnerability to electricity prices, as can be seen from the fact that for the small installation, for every cent reduction in electricity prices, the losses amount to more than 1300 euros, while for the large installation this figure rises to almost 20,000 euros. With investments of EUR 21,182 and EUR 235,675, respectively, this variability in the financial result is a major economic risk. As for the generation loss of the panels, as the manufacturer guarantees a minimum output of 90% on average over their lifetime, the potential losses are reduced to 10% of the electricity. Even so, the impact is significant for different price levels. At prices of 0.08 EUR/kWh or 0.10 EUR/kWh, which are values that have occurred recently, this 10% loss of production amounts to losses of around EUR 1200 and almost EUR 1500, respectively. Although this loss of generation is not the greatest element of vulnerability, its effect is relevant.

Photovoltaic self-consumption in water treatment therefore requires public intervention, which can be up to 40% of the investment to be made. However, it is necessary to know the environmental value of the emission reduction, which is possible from the shadow prices of the European Commission.

Table 6. Quantification of the environmental benefit of the self-consumption projects analysed according to the amount of energy produced and whether the emissions assessed are the national average (0.15 kgCO₂/kWh) or the average of the wastewater treatment plants in the Region of Valencia (0.247 kgCO₂/kWh). Source: Own elaboration with data from Eferficaz, EPSAR [36], the European Commission [41] and Red Eléctrica.

Facility	Emissions (kgCO2/kWh)	Energy Generated (% of Project Energy)
		90	95	100
Ademuz	Low emissions (0.15)	10,166.72 EUR	10,731.54 EUR	11,296.36 EUR
	High emissions (0.247)	16,768.31 EUR	17,699.88 EUR	18,631.46 EUR
El Campello	Low emissions (0.15)	125,328.72 EUR	157,596.02 EUR	165,890.55 EUR
	High emissions (0.247)	262,417.39 EUR	276,996.14 EUR	291,574.88 EUR

shows this value as a function of the avoided energy consumption and the emissions considered, which can vary between 0.15 and 0.247 kg of CO₂ equivalent per kWh. The result is therefore the minimum and maximum values between which the actual value would lie. This indicates the need to study in each self-consumption project which energy source is being substituted, as the environmental benefit obtained will depend on this. Emissions are very different depending on the source substituted, and for each of them the result can vary significantly. In the case of the small plant, with a discount rate of 3%, the minimum social NPV that would be obtained amounts to EUR 10,166.72, and the maximum would be around EUR 18,631.46. This is a wide range but in any case an important value to complement the value of energy production. The range for the large plant is also wide, extending from a minimum of EUR 125,328.72 to a maximum of EUR 295,574.88. Both the minimum and maximum values represent significant parts of the investment made, which conditions the final result of the project.

Adding the values in Table 6 to the financial results shown in Table 4 and Table 5 gives the total NPV of the project depending on the energy price and the amount of electricity generated. This result is shown in

Table A2. Total Net Present value of the Ademuz photovoltaic self-consumption project considering national average emissions (0.15 kgCO₂/kWh). Source: Own elaboration with data from Eferficaz, EPSAR [36], the European Commission [41] and Red Eléctrica.

Total Net Present Value of the Ademuz Project Considering National Average Emissions (EUR)
Market Price of Electricity (EUR/kWh)	Energy Generated (% of Project Energy)
	90	95	100
0.02	−11,895.12 EUR	−11,182.18 EUR	−10,469.23 EUR
0.04	−9228.86 EUR	−8367.80 EUR	−7506.73 EUR
0.06	−6562.61 EUR	−5553.41 EUR	−4544.22 EUR
0.08	−3896.35 EUR	−2739.03 EUR	−1581.72 EUR
0.1	−1230.10 EUR	75.35 EUR	1380.79 EUR
0.12	1436.16 EUR	2889.73 EUR	4343.30 EUR
0.14	4102.41 EUR	5704.11 EUR	7305.80 EUR
0.16	6768.67 EUR	8518.49 EUR	10,268.31 EUR
0.18	9434.92 EUR	11,332.87 EUR	13,230.81 EUR
0.2	12,101.18 EUR	14,147.25 EUR	16,193.32 EUR
0.22	14,767.43 EUR	16,961.63 EUR	19,155.83 EUR
0.24	17,433.69 EUR	19,776.01 EUR	22,118.33 EUR
0.26	20,099.94 EUR	22,590.39 EUR	25,080.84 EUR
0.28	22,766.20 EUR	25,404.77 EUR	28,043.34 EUR
0.3	25,432.45 EUR	28,219.15 EUR	31,005.85 EUR

,

Table A3. Total Net Present value of the Ademuz photovoltaic self-consumption project considering Valencian wastewater treatment plants average emissions (0.247 kgCO₂/kWh). Source: Own elaboration with data from Eferficaz, EPSAR [36], the European Commission [41] and Red Eléctrica.

Total Net Present Value of the Ademuz Project Considering Valencian Wastewater Treatment Plants Average Emissions (EUR)
Market Price of Electricity (EUR/kWh)	Energy Generated (% of Project Energy)
	90	95	100
0.02	−5293.53 EUR	−4213.83 EUR	−3134.13 EUR
0.04	−2627.27 EUR	−1399.45 EUR	−171.63 EUR
0.06	38.98 EUR	1414.93 EUR	2790.88 EUR
0.08	2705.24 EUR	4229.31 EUR	5753.39 EUR
0.1	5371.49 EUR	7043.69 EUR	8715.89 EUR
0.12	8037.75 EUR	9858.07 EUR	11,678.40 EUR
0.14	10,704.00 EUR	12,672.45 EUR	14,640.90 EUR
0.16	13,370.26 EUR	15,486.83 EUR	17,603.41 EUR
0.18	16,036.51 EUR	18,301.21 EUR	20,565.91 EUR
0.2	18,702.77 EUR	21,115.59 EUR	23,528.42 EUR
0.22	21,369.02 EUR	23,929.98 EUR	26,490.93 EUR
0.24	24,035.28 EUR	26,744.36 EUR	29,453.43 EUR
0.26	26,701.53 EUR	29,558.74 EUR	32,415.94 EUR
0.28	29,367.79 EUR	32,373.12 EUR	35,378.44 EUR
0.3	32,034.05 EUR	35,187.50 EUR	38,340.95 EUR

,

Table A4. Total Net Present value of the El Campello photovoltaic self-consumption project considering national average emissions (0.15 kgCO₂/kWh). Source: Own elaboration with data from Eferficaz, EPSAR [36], the European Commission [41] and Red Eléctrica.

Total Net Present Value of the El Campello Project Considering National Average Emissions (EUR)
Market Price of Electricity (EUR/kWh)	Energy Generated (% of Project Energy)
	90	95	100
0.02	−148,388.77 EUR	−113,946.21 EUR	−103,476.41 EUR
0.04	−109,233.97 EUR	−72,616.14 EUR	−59,971.08 EUR
0.06	−70,079.18 EUR	−31,286.08 EUR	−16,465.75 EUR
0.08	−30,924.38 EUR	10,043.98 EUR	27,039.58 EUR
0.1	8230.42 EUR	51,374.05 EUR	70,544.91 EUR
0.12	47,385.22 EUR	92,704.11 EUR	114,050.24 EUR
0.14	86,540.01 EUR	134,034.18 EUR	157,555.57 EUR
0.16	125,694.81 EUR	175,364.24 EUR	201,060.90 EUR
0.18	164,849.61 EUR	216,694.30 EUR	244,566.23 EUR
0.2	204,004.41 EUR	258,024.37 EUR	288,071.56 EUR
0.22	243,159.20 EUR	299,354.43 EUR	331,576.89 EUR
0.24	282,314.00 EUR	340,684.50 EUR	375,082.22 EUR
0.26	321,468.80 EUR	382,014.56 EUR	418,587.55 EUR
0.28	360,623.59 EUR	423,344.62 EUR	462,092.88 EUR
0.3	399,778.39 EUR	464,674.69 EUR	505,598.21 EUR

and

Table A5. Total Net Present value of the El Campello photovoltaic self-consumption project considering Valencian wastewater treatment plants average emissions (0.247 kgCO₂/kWh). Source: Own elaboration with data from Eferficaz, EPSAR [36], the European Commission [41] and Red Eléctrica.

Total Net Present Value of the El Campello Project Considering Valencian Wastewater Treatment Plants Average Emissions (EUR)
Market Price of Electricity (EUR/kWh)	Energy Generated (% of Project Energy)
	90	95	100
0.02	−11,300.10 EUR	5453.91 EUR	22,207.92 EUR
0.04	27,854.69 EUR	46,783.97 EUR	65,713.25 EUR
0.06	67,009.49 EUR	88,114.03 EUR	109,218.58 EUR
0.08	106,164.29 EUR	129,444.10 EUR	152,723.91 EUR
0.1	145,319.09 EUR	170,774.16 EUR	196,229.24 EUR
0.12	184,473.88 EUR	212,104.23 EUR	239,734.57 EUR
0.14	223,628.68 EUR	253,434.29 EUR	283,239.90 EUR
0.16	262,783.48 EUR	294,764.35 EUR	326,745.23 EUR
0.18	301,938.28 EUR	336,094.42 EUR	370,250.56 EUR
0.2	341,093.07 EUR	377,424.48 EUR	413,755.89 EUR
0.22	380,247.87 EUR	418,754.55 EUR	457,261.22 EUR
0.24	419,402.67 EUR	460,084.61 EUR	500,766.55 EUR
0.26	458,557.46 EUR	501,414.67 EUR	544,271.88 EUR
0.28	497,712.26 EUR	542,744.74 EUR	587,777.21 EUR
0.3	536,867.06 EUR	584,074.80 EUR	631,282.54 EUR

included in Appendix A. The improvement of the projects is evident, as it significantly reduces the price needed to make the investment profitable if we also consider the environmental benefit. The high value of reducing greenhouse gas emissions makes the projects beneficial to society with a price of 0.06–0.12 EUR/kWh for the small plant and 0.04–0.10 EUR/kWh for the large plant. In the case of the former, with the current price of 0.09 EUR/kWh it is not yet a good alternative if we consider the average emissions, but it is in the case of the latter. Taking advantage of economies of scale has been shown, in this case, to be a great tool for maximising the value of initiatives with environmental benefits but one which would generate financial losses and which have a significant associated risk. The variability of the Net Present Value of the projects is the same as when only the financial calculation was involved, the difference being that the environmental benefits do not depend on the price of electricity, but on the substitution of a more polluting energy source. This provides a guarantee of benefit in the form of environmental reduction, but this is associated with a large financial risk. In this case, the generation losses of the panels do affect the environmental benefit in a very important way. The clearest case is that of the El Campello plant, where a 10% reduction in production would mean not achieving an environmental benefit of between 30,000 EUR and 40,000 EUR.

In the cases analysed, we have found energy generation at a cost of 0.010 EUR/kWh for the 10.010 kW installation and at a cost of 0.08 EUR/kWh for the 140,000 kWh one. This amount is similar to the one obtained by Harder and Gibson [45], where they found that they needed energy to reach a price of at least 0.16 EUR/kWh for the project to be profitable, despite being a large installation. However, the generation costs of the projects assessed here are an indication of the evolution of the sector. It is currently expected that by 2025 the cost of generating energy in this way will fall to between 0.04 and 0.06 EUR/kWh and further decrease to between 0.02 and 0.04 EUR/kWh by 2050 [5]. These are long-term perspectives and depend on the specific situation of each project, but they allow us to put the results obtained in context. These numbers are per kWh produced, but even so it is worth noting that the generation capacity of solar panels varies depending on the climatic conditions of each region. The Mediterranean area in Europe enjoys a large number of sunshine hours, but the situation varies significantly depending on the region, even within the same country [46]. This does not affect the feasibility of projects, as the costs expressed above are average and represent a range of countries, nor does it imply that countries with fewer sunshine hours cannot develop the solar energy sector. However, it is a conditioning factor for this type of project and is also an example of the potential of this energy source in southern Europe. The expected decrease in the cost of photovoltaic electricity generation, the hours of sunshine in Spain and the environmental benefits obtained make it an alternative that, although it has disadvantages, is a feasible option in certain situations and can help reduce the carbon footprint and even the financial costs of water services such as reuse.

4. Discussion

Rising electricity prices mean a large increase in costs for certain water services such as wastewater management or desalination. This justifies the search for new energy sources that reduce these costs and, incidentally, also the pollution from energy supply. The available data show that self-consumption through photovoltaic panels located on the ground is not yet profitable from a financial point of view, with the main unknown factor being the availability and price of land for the installation, although there are other aspects of great importance. It should be noted that the higher price of electricity means an increase in the cost of wastewater treatment, an activity that is financed through the water bill. This implies that the responsible public entity needs higher revenues, which would come from the budgets of all households, directly affecting the welfare of the entire population. For this reason, minimising the energy costs of water treatment is essential in order to reduce both the pollution generated and the financial cost, thus reducing the impact on citizens’ budgets and moving closer to environmental, economic and social sustainability. Currently, solar panels are an alternative that produces financial losses but generates environmental benefits.

As mentioned above, the time frame of the project is essential to determine its feasibility. An installation with these characteristics cannot compete in the short term with the traditional supply of energy, but if there is an appropriate maintenance of the solar panels and use of the energy generated, we can talk about not only an economic saving for the consumer, which could translate into profits or improvements in terms of business competitiveness [47,48] and also of environmental benefits. That is to say, if we add the economic savings to the environmental benefits derived from the reduction in the use of fossil fuels, we obtain a result that is worth pursuing. However, this use of energy should be continuous for the investment to be worthwhile, as it represents an enormous initial effort in financial terms. For this reason, the public sector must design regulations and provide subsidies to enable such projects to be developed in an appropriate manner. This is the case in the Region of Valencia, where the government covers part of the cost of the project, as well as reducing the bureaucracy required for its development.

Another highly important aspect is the available area for the installation. Given the general nature of this study, we have not considered evaluating how much available space there is in any specific place or the cost of this land. However, services such as wastewater treatment or desalination services are located far from the urban centres so that they do not affect the living conditions of the population in these areas. Furthermore, some treatment plants already have the capacity to generate energy through solar panels [36], so taking these two points into account, this may not be a big problem from a technical point of view, but it would entail additional costs. However, other water services may not have these advantages so these cases would require a more in-depth study although, in any case, it is improbable that the available financial resources would enable many projects of these characteristics to be undertaken at the same time. In any case, recent developments in the photovoltaic panel industry indicate that either we have the necessary surface area for installations, or there are ways to adapt a given installation to the installation surface area [6].

As can be seen from the aforementioned variables such as the price of electricity or the availability of an installation surface, there are several variables that have a significant impact on the calculations of the Cost–Benefit Analysis. In addition to these, the interest rate should be considered as one of the key variables in the financial calculation, as it is not only a cost in terms of financing but also the measure for discounting the value of future profits. In a case such as this where there is a large initial investment but the benefits are spread over time, different interest rates can lead to large changes in the financial performance of exactly the same project. In other words, another variable over which there is no control, since it is determined for society as a whole, such as the price of electricity, is a fundamental element for photovoltaic self-consumption. Another key element is energy consumption, which is related to energy substitution and avoided emissions. However, it is not only the quantity that is important, but also, as can be seen from the difference between the national statistics for Spain and those specific to the Valencian wastewater treatment plants, it is important to analyse which energy source is being substituted. The impact on the environmental benefit is significant, as the environmental benefit is derived from the reduction of emissions. In summary, there are a number of variables that affect the calculations and which need to be considered in the design of each project. Some of these are really complicated to include in the analysis, as predicting interest rates or the price of electricity in the future is very difficult, but the exact land cost or emission reduction can be further specified. It is inevitable the presence of some uncertainty in this type of analysis, which makes it important to make each case study as precise as possible in order to minimize the risk in the performance of each project, thus choosing the best investment alternative for the scarce public resources and achieving the greatest reduction in emissions per unit of money invested.

Finally, we should not forget that we are seeking the financial feasibility of solar panels through constant technological improvements that will lead to their more widespread use. In this sense, the financial feasibility depends not only on the costs of this way of generating energy but also on the price of the competitors. The principal competitors are the companies engaged in supplying energy. The supply through these companies does not involve the high initial costs of self-consumption, but it does imply paying a higher price for the energy in comparison with the operating and maintenance costs of the solar panels. In this way, the evolution of the energy prices is fundamental to determine the feasibility of self-consumption, as the constant saving year after year makes this self-consumption feasible, but if the energy price were low, this saving would not be sufficient so as to guarantee feasibility. At this point, the size of the installation should be taken into account, as our analysis indicates that economies of scale affect both the cost of energy generated and the reduction of greenhouse gas emissions. In addition, we must remember that the generation of energy by solar panels occurs during a specific part of the day, so it must also be known at what time the energy is consumed. In this sense, the installation of batteries could be appropriate in order to store energy produced at times when it is not needed, but the environmental impact caused by batteries should be considered [49]. In recent times, we have found increases in energy prices in Spain, but in recent weeks these have declined sharply. This makes it necessary to calculate the environmental benefit for self-consumption projects to be a viable alternative. Moreover, the cost reduction of solar panels is expected to continue, making them an increasingly attractive alternative [5]. For this reason, self-consumption is an environmentally feasible alternative with financial losses, leaving the investment decision into the public sector. The unsustainability of the traditional supply, which is polluting and dependent on countries that export products such as oil or natural gas, justifies the search for alternative energy sources that bring stability to the energy supply and reduce the pollution that results from it. Photovoltaic self-consumption is one of the main tools available, with the financial cost as the main barrier to its development.

5. Conclusions

The objective of this study is to determine the overall feasibility of the projects aimed at replacing the supply of conventional energy with photovoltaic self-consumption. The study has used information obtained directly from potential buyers and sellers of solar panel systems for self-consumption. The situation is complex due to the volatile price of energy and the need for land and should be adapted to each case analysed.

From a financial point of view, the expected losses are high enough to limit the development of this energy source. Considering only the financial result, PV self-consumption requires an electricity price of between 0.14 EUR/kWh and 0.18 EUR/kWh, which is significantly higher than the most recent prices. In other words, despite recent progress in this technology, it is still far from being a competitive energy source.

The concentration of a large part of the costs in the form of upfront investment, the recent rise in interest rates and the distribution of benefits over 25–30 years [17,18] are barriers that slow down the development of PV self-consumption when environmental benefits are not considered. These benefits in the form of reduced emissions into the atmosphere reduce the price needed to make the panels profitable, which in this case would be between 0.04 EUR/kWh and 0.10 EUR/kWh, closer to current prices. Since the consumer seeks to maximise his financial benefits, it is the responsibility of the public sector to incentivise self-consumption, so that the user can enjoy a reduction in his energy costs and society can enjoy a reduction in atmospheric emissions as a result of public investment. However, the source of electricity being replaced must be taken into account, as not all of them have the same emissions associated with them and the environmental benefit depends on this.

This is a specific case based on the energy costs of Valencian wastewater treatment plants, the generation of solar photovoltaic panels in the Spanish climate and the prices of electricity and electricity generation in Spain, but the logic of this case can be extrapolated to others. The results obtained have shown that similar projects, where the main difference is the size of the installation, have very different financial and environmental returns. The available data have shown that photovoltaic self-consumption is not only vulnerable to the price of electricity and the cost of generation but also to the interest rate, so that its recent rises represent a new barrier to the development of a technology with low financial competitiveness but significant environmental benefits. In this situation, with so many different financial elements to which self-consumption projects are vulnerable, public involvement must be decisive but careful. Priority should be given to investing in projects with the lowest risk or highest environmental benefit per monetary unit invested, so that public resources are used as efficiently as possible.

This line of research is still wide open, and, from what has been observed in this analysis, there are a number of limitations that need to be further explored. One of the key aspects of PV production is its distribution throughout the day. In order to determine the exact impact on costs, it would be necessary to study how this production fits in with the distribution of electricity consumption in addition to the market price of electricity at any given time. Both the financial and environmental benefits depend on the ability of the solar panels to produce electricity at the time when it is demanded; otherwise, there would be no financial savings and no environmental benefit. These environmental benefits, moreover, depend on the source of electricity being substituted, so that the exact emission reduction analysis can be further refined. Finally, interest rates play a key role in the viability of PV self-consumption, highlighting that there is a case for optimising the form of financing and that considering environmental benefits is necessary when designing such projects. Interest rates present a similar problem to electricity prices, as it is very difficult to predict the values over the whole period of analysis.