Techno-Economic Assessment of Renewable Energy Integration in On-Grid Microgrids

Abstract

Integrating renewable energy sources into on-grid microgrids is a promising approach to enhance energy efficiency, reduce greenhouse gas emissions, and improve economic feasibility. This study performs a techno-economic assessment using HOMER Pro to optimize the configuration of a hybrid microgrid incorporating solar photovoltaic (PV), wind turbines, biomass generators, and battery storage. The optimal system comprises 500 kW of solar PV, 300 kW of wind turbines, 200 kW of biomass generation, and 400 kWh of battery storage. The economic evaluation indicates a Levelized Cost of Energy (LCOE) of 0.08 USD/kWh, a Net Present Cost (NPC) of 1.2 million USD, and a Return on Investment (ROI) of 18.5%, demonstrating its financial viability. Sensitivity analysis reveals that a 20% increase in fuel prices leads to a 10% rise in LCOE. In comparison, a 15% reduction in renewable technology costs decreases LCOE by 12%, highlighting the economic stability of the system. Additionally, the environmental analysis shows that the microgrid reduces CO2 emissions by approximately 1,780 tons annually, contributing significantly to sustainability efforts. The financial projection further indicates that the system reaches a break-even point within 7 years, generating a positive net cash flow. These findings suggest that renewable-integrated microgrids are technically feasible and economically viable for on-grid applications. Future research should focus on real-world implementation and policy support to enhance the adoption of such systems. This study provides valuable insights for stakeholders, policymakers, and investors aiming to transition towards cleaner and more sustainable energy solutions.